DA Hike in July 2025: It is being said that the Central Government can give a big gift to the government employees and salary earners before Rakshabandhan by increasing their dearness allowance. The last time the DA was increased by two percent by the Center in March this year. After this the DA became 55 percent.

The government revises the dearness allowance at an interval of every six months, these two months are January and July. This allowance is implemented after the approval of the Union Cabinet. But, do you know on what basis the government takes a decision to increase the DA of central employees? Let us know about this in detail.

Based on CPI-IW

Actually, dearness allowance is based on a formula related to CPI i.e. Consumer Price Index, it keeps an eye on the prices of everyday things, clothes, food items and even fuel. Dearness allowance is made on a special formula, which is based on CPI (Consumer Price Index) released by the Labor Bureau of the Ministry of Labor.

The average of the CPI data of the last twelve months is calculated by the government and then the formula of the Seventh Pay Commission is applied. It can be understood like this that the average of CPI-IW was 143.3 in July 2025. That is, the dearness allowance is calculated from the data that comes after updating it according to the current base year.

How will the formula be applied?

It can also be understood like this that the government has fixed the new base year of CPI-IW as 2016 = Rs 100. Earlier it was 2001 = 100. But now most calculations are based on 2106.

CPI calculation - The government calculates it by taking the average of the CPI-IW data of the last 12 months. The formula used for this is- DA (%) = [(AICPI - 115.76) ÷ 115.76] × 100

Here AICPI means 12 months CPI-IW average (this is based on 2016 base)

115.76= This is base average (based on January 2016)

Suppose the 12 months average of CPI-IW is 139.10, then

DA = [(139.10 - 115.76) ÷ 115.76] × 100

= (23.34 ÷ 115.76) × 100

= 20.16%

That is, dearness allowance will be equal to about 20 percent.

3 percent increase in DA this time?

It is believed that this time there can be an increase of 3 percent in dearness allowance. After this, DA can increase from 55 percent to 58 percent. In such a situation, if someone's salary is twenty-five thousand rupees and according to 55 percent, his DA is thirteen thousand seven hundred fifty rupees, then it will increase to fourteen thousand five hundred rupees. That is, there can be a total increase of 750 rupees.