Increase in allowances!
Expectations of once again increase in Dearness Allowance (DA) for central employees and pensioners have increased. The AICPI-IW data of April 2026 released by the Labor Bureau has indicated that the dearness allowance applicable from July 2026 may increase by up to 3 percent. Although the final decision will be taken only after the data of May and June 2026, but the current trend has brought relief news for the employees.
According to the Labor Bureau, the All India Consumer Price Index for Industrial Workers (AICPI-IW) increased to 149.9 points in April 2026, while it was 149.1 points in March 2026. During the same period, the inflation rate also increased from 4.27 percent to 4.46 percent. This increase in the index is considered important for the calculation of the upcoming dearness allowance.
Why is AICPI-IW important in calculating DA?
The central government calculates dearness allowance of employees on the basis of average AICPI-IW data of 12 months. For the DA revision of July 2026, data from July 2025 to June 2026 will be included. At present, the average AICPI-IW index from May 2025 to April 2026 has been recorded at 147.51.
DA can reach 63 percent
Calculating DA on the basis of currently available data, dearness allowance comes out to be around 62.51 percent. As per the rules, it is rounded to the nearest integer, due to which the DA rate can reach up to 63 percent. Currently, central employees are getting 60 percent DA. If this estimate proves correct then the employees will get 3 percent additional dearness allowance.
How much impact will there be on employees’ salaries?
If the basic salary of a Level-5 employee is Rs 29,200, then at 60 percent DA he gets dearness allowance of Rs 17,520. If DA increases to 63 percent, this amount will become Rs 18,396. That means the monthly income of the employee will increase by approximately Rs 876. Lakhs of central employees and pensioners are likely to get direct benefits from this. Although the April figures are indicating a 3 percent DA increase, the final picture will be clear only after the release of AICPI-IW figures for May and June 2026. After this the Central Government will officially announce the amendment in dearness allowance.
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