Dearness Allowance: AICPI-IW jumps 1.2 points in August; how will it impact next DA hike?

The All-India Consumer Price Index for Industrial Workers (AICPI-IW) rose 1.2 points to 154.4 in August 2026, the Labour Bureau under Ministry of Labour & Employment has reported. The inflation data is used for calculating dearness allowance of central government employees.

“The All-India CPI-IW for August, 2026 increased by 1.2 points and stood at 154.4 points (one hundred fifty-four point four),” the Labour Bureau, said in a press release dated September 30, 2026.

The index is compiled every month from retail prices collected from 317 markets spread across 88 industrially important centres.

As per the release, food and beverages, the heaviest weight in the basket, climbed from 158.9 in July to 161.3 in August, a rise of 2.4 points, the largest of any group. Pan, supari, tobacco and intoxicants edged up from 176.9 to 177.3, clothing and footwear from 158.0 to 158.2, fuel and light from 159.9 to 160.0, and miscellaneous from 148.2 to 149.0.

Housing alone stayed flat at 143.0. The General Index moved from 153.2 to 154.4.

What does rising AICPI-IW mean for employees?

Dearness allowance is revised twice a year — once with effect from January 1 and again from July 1 — to neutralise the impact of price rise on the pay of central government employees. As per the 7th Central Pay Commission formula, each instalment is worked out from the average of the index over a 12-month window. A sustained rise in the index through the window can translate directly into a higher DA percentage.

The August AICPI-IW data will be relevant for DA payable with effect from January 1, 2027. Four more monthly readings from September to December are still to come for that calculation.