Dearness Allowance: AICPI-IW jumps to 151.8 in May. Does it change July 2026 DA hike estimate?

The Labour Bureau under the Ministry of Labour and Employment on Tuesday, June 30, 2026, reported a 0.9-point increase in the All India Consumer Price Index for Industrial Workers (AICPI-IW) for May 2026. This data will be relevant for calculating the Dearness Allowance (DA) hike for central government employees effective from July 1, 2026.

In April, the AICPI-IW increased by 0.8 points to 149.9 from 149.1 in March 2026. The AICPI-IW for February was 148.5 and 148.6 in January.

Last year, the AICPI-IW for December 2025 was 148.2. In November and October 2025, the inflation index increased by 0.5 points and 0.4 points, respectively.

“The All-India CPI-IW for May, 2026 increased by 0.9 points and stood at 150.8 points (one hundred fifty point eight) ,”the Labour Bureau said in a press release dated May 29, 2026.

The year-on-year inflation for May 2026 stood at 4.72% as compared to 2.93% in May, 2025.

All-India group-wise CPI-IW for April and May 2026

How will the AICPI-IW data for May 2026 affect DA hike calculation?

As per the 7th Pay Commission norms, the AICPI-IW data for May 2026 will be relevant for the DA hike calculation with effect from July 1, 2026

The government calculates the DA hike using the AICPI-IW data of the past 12 months using the following formula:

DA = [{(Average AICPI-IW of last 12 months x 2.88)−261.41}/261.41]×100-Existing DA(%)

Even as the AICPI-IW has been increasing for the last few months, the data for June 2026 will also be required for the full calculation as per the above formula.

However, for understanding purposes, the following is a calculation assuming the AICPI-IW increases in June at the same rate as in May 2026. In this case, the last 12-month data for DA hike calculation would be as follows:

The last 12 months' average AICPI-IW is 148.61. We can put this in the above formula to guess the expected hike:

DA = [{(148.63 x 2.88)−261.41}/261.41}×100]-60%

Here's a step-by step calculation:

Step 1: 148.63×2.88=428.0544

Step 2: 428.0544 - 261.41 = 166.6444

Step 3: 166.6444/261.41 = 0.6373

Step 4: 0.6373 × 100 = 63.73%

Step 5: (63.72- 60)% = 3.73%

From the above, the DA is 3.72%.

Please note that the above is just for understanding the process of DA hike calculation. The final hike percentage depends on several factors, and it is decided by the Union Cabinet, chaired by the Prime Minister.