A major update has arrived for central government employees. The Labor Bureau has released the All India Consumer Price Index (AICPI-IW) for September 2025. This time, the index has registered a slight increase of 0.2 points, reaching 147.3.
This means that the dearness allowance (DA) payable from January 2026 has reached 59%. However, this is not final; the numbers for October, November, and December are still to come. The real question is: how much will it be, as it directly impacts the 8th Pay Commission.
What does the AICPI data tell?
According to the Labor Bureau report, the AICPI-IW stood at 147.3 in September 2025, an increase of 0.2 points from 147.1 in August. This means that the pace of inflation has increased slightly, and this is expected to lead to a slight increase in DA as well.
- DA effective from July 2025: 58%
- Index as of September 2025: 147.3 (Base Year 2016=100)
- Average Index so far: 416.42
- Based on this, expected DA from January 2026: Up to a maximum of 60%
What will be the effect of increasing DA?
DA, or dearness allowance, directly affects both salary and pension. Once the new DA is implemented in January 2026, it will benefit both central government employees and pensioners.
If the current forecast is correct:
- DA by July 2025: 58%
- From January 2026: Up to 60%
That’s an average increase of 2 percent. While this may seem small, for millions of employees, it could make a difference of hundreds to thousands of rupees per month in their salaries.
Why is the DA of January 2026 special?
January 2026 marks not just a new year but also the potential starting point for a new pay structure, as this is the month from which the 8th Central Pay Commission is expected to come into effect.
Points to note
- The new basic pay will be decided as per the recommendations of the 8th Pay Commission.
- DA will be reset to 0% again as soon as the new pay scale is implemented.
- That is, the DA of January 2026 will be the figure of the last round, which is being decided under the system of 7th Pay Commission.
AICPI table: Expected figures from July to December 2025
| month | Index (AICPI-IW) | 7th CPC DA (%) | possible solution |
|---|---|---|---|
| July 2025 | 146.5 | 58.53% | Applicable |
| August 2025 | 147.1 | 58.94% | Release |
| September 2025 | 147.3 | 59.29% | Release |
| October 2025 | 147.3 | 59.55% | estimated |
| November 2025 | 147.3 | 59.80% | estimated |
| December 2025 | 147.3 | 60.12% | estimated |
| Average estimate | 147.1–147.3 | ≈59–60% | Expected DA from January 2026 |
What has been said by the government?
The Labor Bureau said in a press release that this index is based on retail price data taken from 317 markets.
According to the report:
“The All-India CPI-IW increased by 0.2 points to 147.3 in September 2025.”
At the same time, the annual inflation rate (year-on-year inflation) was 2.79%, which is lower than the 4.22% of last year in September 2024. This means that inflation appears to be under control, but the basic price level is rising – hence an increase in DA is certain.
How much will salary and pension increase?
If DA reaches 59% or 60% from January 2026, an employee with a basic pay of ₹50,000 will have a DA of ₹30,000 (60% of Basic Pay). This will be a direct benefit of ₹1,000 to ₹1,500 compared to earlier (58%).
Similarly, for pensioners too, the increase in DA can lead to an increase of ₹700-₹1000 every month.
Will the 8th Pay Commission affect this?
Of course, this figure (60%) can be considered final under the 7th CPC. Because, after the new pay structure is implemented, DA will be recalculated from zero. Therefore, this DA revision may be the last update of the 7th Pay Commission before January 2026.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
Add businessleague.in as a Preferred Source
