The Central Government revises the Dearness Allowance (DA) for employees and pensioners twice a year—in January and July—based on the All-India Consumer Price Index (AICPI) data. The latest DA hike of 2% was implemented in January 2025, raising the rate to 55%. The next revision is due in July 2025, and here’s what we know so far.
Will DA Increase by 3% in July 2025?
The July 2025 DA hike will depend on the CPI-IW (Consumer Price Index for Industrial Workers) data released by the Labour Ministry for January to June 2025.
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January 2025 AICPI: 143.2
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February 2025: Dropped by 0.4 points to 142.8
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March 2025: Rose by 2 points to 143.0
With three months of data in, the current DA score stands at 57.06%. If the April, May, and June 2025 data shows an upward trend, pushing the DA score above 58%, employees can expect a 3% hike. However, if the index declines, the increase may remain at 2%.
Projected DA Rates for July 2025
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Expected DA: 57% to 58% (up from 55%)
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Example Calculation:
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Basic Salary: ₹18,000
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At 57% DA: ₹10,260
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At 58% DA: ₹10,440
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How is DA Calculated?
The formula for calculating DA under the 7th Central Pay Commission (CPC) is:
DA% = [ (Average of AICPI-IW for last 12 months – 261.42) / 261.42 ] × 100
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Base Year: 2001 = 100
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Current 12-month average CPI-IW (example): 392.83
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Calculation:
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(392.83 – 261.42) / 261.42 × 100 = 50.26%
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The government rounds off decimals, so if the calculation reaches 50.28%, the DA is set at 50%.
Key Takeaways
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Next DA revision in July 2025 (likely 57-58%)
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Final decision depends on April-June 2025 AICPI data
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A 3% hike is possible if inflation rises
Stay tuned for official updates after June 2025 data is released!