Dearness Allowance: AICPI-IW rises in September. What does it mean for DA hike, 8th CPC salary?

"The All-India CPI-IW for September, 2025 increased by 0.2 point and stood at 147.3 (one hundred forty-Seven point Three). Year-on-year inflation for the month of September, 2025 stood at 2.79% as compared to 4.22% in September, 2024," the Labour Bureau said in a release dated October 31, 2025.

What does AICPI-IW data means for DA hike, 8th CPC salary?

As per the recommendations of the 7th Pay Commission, the AICPI-IW data is currently used for determining the rate of increase in DA and dearness relief (DR) for central government employees and pensioners.

DR/DR helps employees and pensioners combat the impact of inflation on their monthly pays.

The AICPI-IW data from July to December 2025 will be used by the government to determine the dearness allowance hike with effect from January 1, 2026. The AICPI-IW data has already increased in July, August, and September. If it continues to increase for the next three months (October, November and December) then central government employees and pensioners may expect a better DA/DR hike from January 2026.

For the benefit of employees and pensioners, the rate of DA/DR applicable in January 2026 may also be used by the newly set up 8th Pay Commission for determining the extent of pay hikes. Higher DA in January may lead to a higher pay hike.

However, the Finance Ministry has asked the 8th Pay Commission to review the current allowances provided to employees and pensioners. Therefore, one can't say with certainty how the DA rate applicable in January 2026 will eventually impact the pay hike under the 8th CPC.

The 8th CPC is likely to take up to 18 months to review current pay structures and submit its recommendation. Please note that the rate of DA is likely to be reset to zero after the implementation of the 8th CPC recommendations.