DA hike news: Over 1.2 crore central government employees and pensioners were left disappointed today as the Union Cabinet, chaired by Prime Minister Narendra Modi, did not take any decision on the dearness allowance (DA) and dearness relief (DR) hike.
There was strong expectation that the government might approve a 2% increase in DA/DR from 58% to 60% for the January–June 2026 cycle in today’s meeting. However, no announcement was made, keeping the DA unchanged at 58% of basic pay for now.
What happens next on DA hike
With no decision taken in March, the DA revision is now likely to be announced in April.
This is not unusual. In 2023, the government had announced the January DA hike on April 4, instead of March. A similar delay now suggests that employees may have to wait a little longer for the revision.
What is expected DA hike
Even though the decision is pending, a 2% DA hike is still widely expected, based on inflation data. The All-India CPI-IW index for December 2025 stood at 148.2 and this pushes the DA calculation to 60.34%. After ignoring decimals, the payable DA works out to 60%. This means whenever announced, the hike is likely to be 2%, taking DA from 58% to 60%.
What the DA hike will mean (once approved)
Once the government clears the proposal, the impact will be increase in monthly salary of employees, higher pension payouts (DR) and arrears from January 2026 onwards.
For example, an employee with a basic pay of Rs 18,000 would see Rs 360 increase per month, around Rs 1,080 as arrears for three months.
Why DA revision matters
DA is revised twice a year—January 1 and July 1—to offset inflation. It is calculated based on the 12-month average of CPI-IW data, ensuring that salaries and pensions keep pace with rising prices. This makes DA a crucial component of income for government staff and retirees.
What was the last DA hike
The last revision came in October 2025, when the government approved a 3% increase, raising DA from 55% to 58%, effective July 1, 2025.
Compared to that, the expected 2% hike reflects moderate inflation trends in recent months.
First revision after 7th Pay Commission term
This upcoming DA revision is also important as it comes after the end of the 7th Pay Commission term on December 31, 2025. While the existing formula continues, this will be the first DA hike in the post-7th CPC phase.
Unions demand new DA formula under 8th Pay Commission
Meanwhile, employee unions have stepped up demands ahead of the 8th Pay Commission, especially on how DA is calculated.
Their key demands include revising the DA formula to reflect current consumption patterns, updating the base year for inflation calculation, merging DA with basic pay at a certain threshold and making revisions more responsive to actual price rise.
These demands are expected to be part of broader discussions when the 8th Pay Commission framework is finalised.
Summing up…
For now, DA remains at 58%, with no decision taken in today’s Cabinet meeting. However, with inflation data already pointing to a 2% increase, the announcement is likely just delayed—not denied.