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A very good news has emerged for lakhs of central government employees and pensioners. Giving relief in the times of inflation, the government is soon going to increase your Dearness Allowance (DA) and Dearness Relief (DR) by 3 percent. The latest Industrial Workers Consumer Price Index (AICPI-IW) data has confirmed this. After this increase, the DA which was currently 60 percent, will directly increase to 63 percent. This will have a direct and positive impact on your ‘take-home’ salary and pension amount.

How is your dearness allowance decided?

Often people think that the increase in DA depends on the will of the government, but in reality it is a fixed mathematical process. Dearness Allowance for Central Government employees is calculated on the basis of ‘Consumer Price Index’ (AICPI-IW) released by the Labor Bureau.

There is a special formula for its calculation: DA% = [{12 महीने का औसत AICPI-IW ÷ 261.42} – 1] × 100. Since currently the base year of AICPI-IW is 2016, it is first converted to the base year of 2001 (multiplied by 2.88) to get accurate data. On the basis of this mathematics, the final figure of your allowance is arrived at.

Understand mathematics from the figures of May 2026

According to the latest data from the Labor Bureau, the index for industrial workers has reached 150.8 in May 2026. If we take the average of the last 12 months, it comes to 148.075. When we convert it to 2001 base (148.075 × 2.88), it becomes 426.456. Now when we fit it into the government formula, the result comes to 63.13%. As per government rules, it is taken in round figure, hence your new dearness allowance 63% It has been decided.

8th Pay Commission and Arrears Status

Along with this increase in DA, the eyes of the employees are also fixed on the 8th Pay Commission. According to experts, recommendations for new pay scale may come by the end of next year. The good thing is that it can be considered effective from January 2026 itself. In such a situation, when this will be implemented, the employees can get huge arrears of 18 to 24 months in lump sum. At present, the calculation for July 2026 is being done only on the standards of 7th Pay Commission.

When will the official announcement be made?

The government revises DA twice a year (January 1 and July 1). Although the formal announcement by the cabinet may be delayed, there is no need to panic because the increased DA is always available on the scheduled date (July 1). It is expected that the government will make its official announcement around Diwali, i.e. in October. This announcement during the festive season will bring arrears and increased salary in the accounts of the employees, which will double the happiness in their homes.