Over 1.2 crore central government employees and pensioners across India eagerly wait for one announcement every six months – the Dearness Allowance (DA) Hike. This allowance helps them cope with rising living costs and directly impacts their monthly salary.
However, after a disappointing 2% hike in the first half of 2025, expectations for the upcoming hike from July to December are low. Early figures suggest another modest increase, raising concern among employees.
Only 2% Hike in Early 2025 Disappointed Employees
For the period of January to June 2025, the government increased DA by just 2%, bringing the total to 55%. This was the lowest hike in the past 78 months, leaving many employees dissatisfied. Now, with weak inflation data, hopes for a bigger hike in the second half of the year have faded.
How Is DA Hike Calculated?
The DA Hike is based on the AICPI-IW (All India Consumer Price Index for Industrial Workers). This index tracks inflation and is released monthly. If the index goes up, DA increases accordingly.
But the AICPI figures for January and February 2025 have shown a decline. If this trend continues through March to June, the expected DA hike in July may only be 1% to 2%.
Recent DA Hike History and Upcoming Estimates
| Period | DA Increase (%) | Total DA (%) | Remarks |
|---|---|---|---|
| Jul–Dec 2023 | 4% | 50% | Satisfying hike, positive response |
| Jan–Jun 2024 | 4% | 54% | Stable trend |
| Jul–Dec 2024 | 1% | 55% | Slight but acceptable |
| Jan–Jun 2025 | 2% | 55% | Lowest hike in 6.5 years |
| Jul–Dec 2025 (Estimated) | 1–2% | 56–57% | Low hike expected due to weak AICPI trends |
Could This Be the Last DA Hike Under the 7th Pay Commission?
December 2025 marks the likely end of the 7th Pay Commission tenure. That means the July–December DA hike could be the last one under this system. After this, a new panel – possibly the 8th Pay Commission – may be formed to revise salaries and allowances for the next cycle.
For employees, this could be their “farewell allowance” under the current pay commission.
Growing Concerns Among Employees
Employee unions are raising their voices. They argue that rising prices of essentials like electricity, petrol, medicines, and food items have already hit middle-class government employees hard.
A small DA hike will only increase financial pressure. Many organizations are demanding at least a 4% hike to help employees maintain their purchasing power and standard of living.
When Will the DA Hike Be Announced?
The January–June DA hike is usually announced in March, while the July–December hike is expected around October or November. However, discussions and predictions start as early as July.
Final figures for the AICPI index from March to June 2025 are yet to come. The government is likely to review the complete data around August or September, and only then make the final decision.
DA Hike Is More Than Just Extra Pay
For government employees, especially pensioners and those in rural or small towns, a DA hike is more than just a pay increase. It directly impacts their monthly budget and helps maintain a decent standard of living.
Unfortunately, the July–December 2025 hike is expected to be small, due to falling AICPI numbers. And since this could be the last DA revision under the 7th Pay Commission, employees are understandably disappointed.
All eyes are now on the next AICPI numbers and the government’s final decision in the coming months.
