Dearness Allowance hike: Central Govt employees' DA could jump to 60% of Basic Pay in 2026; here’s why

The Government announces revised DA/DR rates twice a year effectively from January 1 and July 1 as per the recommendation of the 7th pay commission.

However, the announcement of the DA hike is typically done around the festival season. For instance, in March for DA hike with effect from January 1 and in September-October for DA hike with effect from July 1, 2025. This means, employees and pensioners need to wait beyond July for DA/DR hike announcement.

How has DA increased till now?

Since the implementation of the 7th Pay Commission in 2016, the DA rate increased from 0% to 55% of Basic Pay as follows:

With effect from July 2025, central government employees may expect up to 3% hike in DA, which will raise the total DA rate from 55% to 58% of Basic Pay.

After July, the next DA hike would be expected from January 1, 2026. So if the DA reaches 58% from July and there is another hike of even 2% from January then the overall DA will reach 60% of Basic Pay.

What will 8th CPC do?

The 8th Pay Commission, which is expected to be implemented from January 1, 2026, may take at least 60% DA/DR into account while calculating pay revisions.

Most likely, the 60% DA will be merged with the Base Salary for revised calculations.

Merging past DA/DR is a standard practice during pay commission revisions. This also resets the DA cycle.