Dearness allowance: AICPI-IW index drops 0.5 points ahead of expected DA hike of Central Govt Employees

Ahead of the expected dearness allowance (DA) hike for central government employees, the All India Consumer Price Index for Industrial Workers (AICPI-IW) for January 2025 decreased by 0.5 points to 143.2.

This is another consecutive month of decline in AICPI-IW. In December 2024, the AICPI-IW decreased by 0.8 point to 143.7.

The Shimla-based Labour Bureau of the Ministry of Labour and Employment compiles the consumer price index for industrial workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country.

"The All-India CPI-IW for January, 2025 decreased by 0.5 point and stood at 143.2 (one hundred forty three point two)," the Labour Bureau said in a press release dated March 13, 2025.

The consumer price inflation for industrial workers has not only declined on a monthly basis but also dropped sharply compared to the AICPI-IW data of January 2024.

"Year-on-year inflation for the month of January, 2025 stood at 3.10% as compared to 4.59% in January, 2024," the labour bureau said.

**AICPI-IW for December 2024 and January 2025 **

Source: Labour Bureau, Shimla

Why does this data matter?

The central government uses AICPI-IW inflation data to calculate the dearness allowance rate hike of its employees as per the recommendation of the 7th pay commission.

DA is provided to employees on top of their basic salary. Calculated as a percentage of the basic salary, DA helps in countering the impact on inflation on an employee's monthly payouts. Currently, central government employees are getting 53% of their basic pay as dearness allowance.