7th Pay Commission : Government employees may get good news in September next month. Under the 7th Pay Commission, the Dearness Allowance (DA) of government employees is to increase.
The government has increased the DA every time before Diwali. This time Navratri starts from September. It is expected that the government may announce an increase in DA in September. The government may announce DA anytime but it will be considered effective from July 1, 2025.
How much will DA increase
It is expected that DA can be increased by 3 to 4% in July 2025. That is, the DA of employees can increase to 58% or 59%. The government increases DA twice every year . The first announcement for January is made in February-March. Whenever the government announces it, it is considered applicable from January 1. The second announcement for July is made in September-October. It is considered applicable from July 1. It does not matter when the government is announcing it. Employees get that much arrears along with the salary.
How is DA decided?
DA is calculated on the basis of Consumer Price Index for Industrial Workers ( CPI-IW) . This data is released by the Labor Ministry every month.
According to the 7th Pay Commission formula, DA (%) is decided like this
DA (%) = [(12 -month average CPI-IW – 261.42) ÷ 261.42] × 100
Here 261.42 is the base CPI-IW of year 2016.
DA also depends on inflation figures
Although the complete average of CPI-IW is not yet out till May 2025 , CPI-AL and CPI-RL for agricultural and rural workers have registered a decline.
CPI-AL: 2.84%
CPI-RL: 2.97%
Both of these are not directly used in DA , but show the trend of inflation.
How much can DA be?
If CPI-IW remains stable or increases slightly till June, the government can increase it by 3% to 4%. This can increase the total DA to 58% or 59%. The final announcement of the increase in DA will be made after the CPI-IW figures are released at the end of July and after cabinet approval in September-October. Then its benefit will be available with arrears from July 1, 2025.
