Dearness allowance: AICPI-IW jumps 1% in July; will it impact DA hike decision in September?

Ahead of the expected dearness allowance hike announcement for Central Government employees in September, the latest All India Consumer Price Index for Industrial Workers (AICPI-IW) data for July 2025 shows a big jump of 1.03% or 1.5 points compared to just 1 point (0.69%) in June 2025.

In June 2025, the AICPI-IW had increased to 145 from 144 in May 2025.

"The All-India CPI-IW for July, 2025 increased by 1.5 points and stood at 146.5 (one hundred forty-six point five)," the Labour Bureau said in a press release.

The Labour Bureau is an attached office of the Ministry of Labour and Employment. It compiles the Consumer Price Index for Industrial Workers every month based on retail prices collected from 317 markets spread over 88 industrially important centres in the country.

What does the rising AICPI-IW mean?

The increase in AICPI-IW data in July will not have an impact on the DA hike announcement expected from the Government in September. Instead, the data will be relevant for calculating the DA hike to be paid from January 2026.

In September, the Government is expected to announce a 3% hike in DA based on the AICPI-IW data between January and June 2025. And the DA hike, if announced, will be effective from July 1, 2025.

How will July AICPI-IW data impact Central Government employees?

The AICPI-IW data from July will help decide the DA rate from January 2026. Moreover, the rate of dearness allowance in January will also have an impact on deciding the minimum pay under the upcoming 8th Pay Commission. Please note that the DA rate will be reset to zero after the implementation of the 8th Pay Commission's recommendation.