Dearness allowance: AICPI-IW rises 1.1 points in September; how much can DA increase from January 1, 2027?

The All-India Consumer Price Index for Industrial Workers rose 1.1 points to 155.5 in September 2026. This is the ninth monthly reading in the 12-month window that will decide the dearness allowance rate payable from January 1, 2027.

"The All-India CPI-IW for September, 2026 increased by 1.1 points and stood at 155.5 points (one hundred fifty-five point five)," the Labour Bureau said in a release dated October 30, 2026.

"Year-on-year inflation for the month of September, 2026 stood at 5.57% as compared to 2.79% in September, 2025," it added.

The AICPI-IW data is compiled every month by the Labour Bureau under Ministry of Labour & Employment from retail prices collected from 317 markets across 88 industrially important centres. It is the sole input into the dearness allowance formula for central government employees.

What does the September data mean for employees?

If the index holds at that level through December, calculation points to at least a four-percentage-point increase in DA, taking it from 63% to 67%.

Dearness allowance is revised twice a year, with effect from January 1 and July 1 to neutralise the effect of price rise on central government employees' salary.

Under the 7th CPC formula, each instalment is computed from the average of the index over a 12-month window. For the January 2027 instalment, that window is January to December 2026, which makes September the ninth of twelve readings. Data for October, November and December are yet to come.

DA from July 1, 2026 was fixed at 63%, computed from the 12 months between July 2025 and June 2026. The next hike will follow the same route, applied to the 2026 calendar year.

For understanding purse, one can make an estimate of the expected DA hike by assuming the AICPI-IW remains same as September for the remaining three months and do the calculation using DA formula.

DA = [{(Average AICPI-IW × 2.88) − 261.41} ÷ 261.41] × 100. Working: 152.37 × 2.88 = 438.82; 438.82 − 261.41 = 177.41; (177.41 ÷ 261.41) × 100 = 67.87%, taken as 67%.

You can put the average through the formula: 152.37 × 2.88 = 438.82; subtract the base of 261.41, which gives 177.41; divide by 261.41 and multiply by 100, which gives 67.87%.

Government usually ignores the decimal, so the rate from January 1, 2027 works out to 67%. Against the 63% now in force, that is a hike of four percentage points.

Please note that the final DA figure depends entirely on the index holding flat. Any further rise in AICPI-IW in October, November or December would push the average, and the rate, higher. While a fall would pull it down.