Before Diwali, the central government can give a big gift to its millions of employees and pensioners. For the period of July-December 2025, there are reports of a possible increase of up to 3 percent in Dearness Allowance-DA. Right now the DA is 55 percent and if there is a proposed increase, then it can increase to 58 percent. According to a report by Financial Express, this time the government is expecting a higher increase, as last time in January 2025, only 2% was increased, which gave resentment to the employees.
CPI-IW indication of increase clear from data
Consumer Price Index for industrial workers (CPI-IW) for industrial workers. Recently, the Labor Bureau released the CPI-IW data of June 2025, which has increased by 1 point to 145. With this, the average index of 12 months from July 2024 to June 2025 has been 143.6.
The same figures are included in the formula for DA determination. Based on this average, it is being estimated that DA may increase by 3% this time. Usually this announcement is made by the Central Government in October or November, so that it can be benefited before Diwali.
How much will the salary increase? Learn calculation
The 3 percent increase in dearness allowance will directly affect the monthly salary of central government employees and the monthly pension of pensioners. For example, if the basic salary of an employee is ₹ 40,000, then at present he gets ₹ 22,000 DA according to 55% DA. If DA turns 58%, this amount will increase to ₹ 23,200.
This means that there will be an increase of ₹ 1,200 every month in the employee’s salary. Apart from this, due to the increase in dearness allowance, there is also an increase in travel allowance (TA), House Rent Allowance (HRA) and other related allowances, which further increase the total income.
Employees were disappointed due to last increase
In January 2025, the government increased only 2% DA, which was the lowest growth in the last seven years. Earlier, an increase of 4% or more was generally done. In such a situation, employees and pensioners are expected to increase more this time.
Experts believe that according to CPI-IW data, the government can approve the 3% increase in view of the current inflation rate. This step will not only give relief in the pockets of the employees, but will also strengthen demand in the upcoming festivals.