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DA Hike in July 2025: The central government had increased the Dearness Allowances of government employees by 2% for January-June 2025, which is considered to be the lowest increase in about 78 months. After this increase, the DA of Central Government Employees has currently increased to 55%. Dearness Allowance is given to government employees (DA Hike for Govt Employees) and pensioners to provide relief from the effects of inflation, and it is revised twice a year, once for January-June and the second time for July-December. Usually, the government announces it in March and then in October or November. More than 1.2 crore employees expect a good increase in DA.
After a marginal increase of just 2% for January-June, now more than 1.2 crore central employees and pensioners are hopeful that this time there will be a good increase in DA for July-December. The special thing is that this will be the last scheduled DA revision under the 7th Pay Commission, as its term will end on 31 December 2025.

After this, the recommendations of the 8th Pay Commission are to be implemented. However, looking at the current situation, it is very unlikely that the recommendations of the 8th Pay Commission will be implemented from January 2026. At present, it seems that the wait for this may be long.

The reason for the increasing expectations of the employees is the data of CPI-IW, i.e., Consumer Price Index for Industrial Workers, released in March 2025. This month, the index has increased by 0.2 points to 143.0. Even though this is slightly less than January's 143.2, the good thing is that this figure breaks the trend of continuous decline from November 2024 to February 2025.

The annual inflation rate in March was 2.95%, which is slightly higher than February. The prices of food items did not increase much, due to which a slight positive movement was seen in CPI-IW.

How is DA calculated? (DA Calculation Formula)

According to the 7th Pay Commission, DA calculation is done based on the average of CPI-IW of the last 12 months. Its formula is:

DA (%) = [(12-month CPI-IW average) - 261.42] ÷ 261.42 × 100

At present, DA has increased by 55% since January 2025. Now the CPI-IW figures for April, May, and June 2025 will decide how much the increase will be in July.

How much can DA increase in July 2025?

According to the average data till March 2025, the estimated percentage of DA has reached 57.06%. If there is a slight increase in CPI-IW in the next three months, then this average can go up to 57.86%. If this happens, then DA can go directly to 58% after rounding. But if the average is less than 57.50%, then DA can stop at 57% only. That is, looking at the current trend, the expectation of an increase of 2% to 3% is considered strong.

Before July, CPI-IW figures for April, May, and June 2025 will come. June figures will be released in late July or early August. Then the average of 12 months will be completed and the new DA revision will be officially announced by the government.

Central employees and pensioners expect DA hike up to 3%

Even though the increase in CPI-IW has been marginal, it is a positive sign after the decline. In such a situation, if inflation remains under control or slightly better in the next few months, then central employees and pensioners can get a DA hike of 2% to 3% in July. And this will be the last DA hike of the 7th Pay Commission. After this, everyone's eyes will be on the 8th Pay Commission.

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