Dearness Allowance Hike: AICPI-IW rises to 145; June data fuels hopes for Central Govt employees

The All India Consumer Price Index for Industrial Workers (AICPI-IW) increased by 1 point to 145 in June 2025. This was the fourth consecutive month when the key inflation data considered for the DA hike decision moved upwards.

AICPI-IW is the key benchmark used for calculating DA/DR hike as per the recommendation of the 7th Pay Commission.

"The All-India CPI-IW for June, 2025 increased by 1.0 point and stood at 145.0 (one hundred forty-five)," the Labour Bureau said in a release dated July 31, 2025.

Source: Labour Bureau

How much hike is expected?

With the AICPI-IW data for June out, employees and pensioners can now expect a 3% hike in DA/DR effective from July 1, 2025.

After declining in the first two months of 2025, the AICPI-IW has increased in the last four months: from 143 in March to 143.5 in April to 144 in May 2025 and to 145 in June.

Although the increasing AICPI-IW data serves as a good reason for an increase in DA/DR for employees and pensioners, the final decision is in the hands of the Government.

However, various reports since last month have projected the DA/DR hike to be around 3%. If approved, the DA/DR rate of Central Government employees and pensioners will rise to 58% of their basic salary and pension respectively. This may also be the last increase in DA/DR before the 8th Pay Commission starts its work.

When will the next DA/DR hike announced?

The next DA hike will be effective from July 1, 2025. Even as July has already ended, employees and pensioners may need to wait longer for the DA hike announcement. Generally, the Central Government announces a DA/DR hike effective from 1st July during festival season around September-October.

It is expected that the Government may take he final decision on DA hike in September 2025.

(This article was first published on August 1, 2025)