Da hike in July 2025: It is being said that a big gift can be given to government employees and pensioners before Rakshabandhan on behalf of the central government. The government can increase their dearness allowance – DA. The last time the central government had increased the DA by two percent in March this year, after which DA increased to 55 percent.

The government revise the dearness allowance at an interval of every six months, these are two months- January and July. After the approval of the Union Cabinet, this allowance is implemented. But, do you know on what basis the government decides to increase the DA of central personnel? Let us know about this in detail.

How is DA decided?

Actually, dearness allowance CPI-IW (Consumer Price Index for Industrial Workers) is based on the Consumer Price Index for industrial workers. This index is based on the prices of everyday things – like clothes, food items, fuel etc. Dearness allowance is made on a particular formula, which is based on the CPI (Consumer Price Index) issued by the Labor Bureau of the Ministry of Labor.

The government takes out its average by taking CPI-IW data for the last 12 months and then decides the DA from the formula of the Seventh Pay Commission. It can be understood that the CPI-IW average has been 143.3 in July 2025. That is, according to the current base year, the data that comes updated is calculated as expensive.

What is the calculation formula?
The government takes out its average by taking CPI-IW data for the last 12 months and then decides the DA from the formula of the Seventh Pay Commission.

DA (%) = [(AICPI – 115.76) ÷ 115.76] × 100

AICPI = 12 months CPI-IW average (based on 2016 base year = 100)
115.76 = This is Aadhaar average (CPI value of January 2016)

For example-

Suppose the average CPI-IW = 139.10 of 12 months is, then da = [(139.10 – 115.76) ÷ 115.76] × 100
= (23.34 ÷ 115.76) × 100
= 20.16%

That is, dearness allowance will be equal to about 20 percent.

How much can DA increase this time?

If the CPI-IW averaged by July 2025 is around 143.3, then the increase of 3 to 4 percent in DA is considered possible. In such a situation, DA can increase from 55% to 58-59%, which will be a relief news for millions of central employees and pensioners.

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