DA Increment: As the month of July approaches the festivals for people of central government DA eligibility marks a significant point of concern, as over 1 crore central government employees along with the pensioners are anticipating the “Dearness Allowance” hike to be issued. Based upon July 2025’s AICPI data estimations suggest that an increase of 3-4% DA might be viable.As of now, the current inflation value for DA stands at 55% so there is a possibility that it might be increased to 58% or infer. There’s still some time for the June data to be released, so for now we expect to make interpretations of the value that will be released on 31st July.DA is subjected to be revised twice in a year, once in January and then in July, the revision relies on the midterm data outcome of the AICPI. These datasets is published every 6 months that is from January to June and then from July to December.The DA of employees and pensioners governed by the 7th Pay Commission was increased by 2% to 55% from March 2025, where DA will increase again in July 2025. It depends on the semi-annual figures from January to June. It is expected to be released after Rakshabandhan.Dearness allowance may increase by 3 or 4 percentLooking at the AICPI data so far, AICPI INDEX was 143.2 in January 2025, AICPI-IW 142.8 in February, 143.0 in March, 143.5 in April, and then 144.0 in May. With a 0.5 point increase in May, DA now stands at 57.85%, which is indicating 3%. However, the June figures, which include a 0.5 point increase, have the potential to raise DA by up to 4%. June figures are yet to come, which will released on 30-31 July 2025. Otherwise, 3% is guaranteed.The new salary bracket should be coming out around the time of Diwali celebrations. That is, October-November. Going by the information available, by July the AICPI IW index data is available by the end of June. Thereafter, the Labor Bureau sends off their file to the Finance Ministry which then presents it to the cabinet meeting for approval. Following this, as is usual practice, the Finance Ministry will issue an order and the salary bracket will start being enforced. The new rates will be as of July 2025 so these arrears will be due then. DA Calculation FormulaPensioners and employees of the federal government have dearness utility allowance that is calculated based on a specific formula. The formula is: 7th CPC DA% = [{12-month average of AICPI-IW (base year 2001=100) for the last 12 months – 261.42}/261.42×100] DA%= (392.83-261.42)/261.42×100 = 50.26. Focusing on employees that fall under the 7th Pay Commission, the above formula holds for all other pensioners and employees. The last 12 months average CPI-IW is 392.83 yielding DA to be 50.28 percent of the base salary. Thus the government will be able to grant an increase of 50% in the dearness allowance.
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