Central government employees and pensioners are keeping a close watch on the next Dearness Allowance (DA) revision after the latest inflation figures provided a fresh indication of how the allowance could change in January 2027.
The September 2026 Consumer Price Index for Industrial Workers (AICPI-IW) has increased to 155.4, compared with 154.5 in August. This latest movement has added to expectations of another DA increase in the coming revision.
Current DA Rate Stands at 63%
The Union Cabinet recently approved a 3-percentage-point increase in Dearness Allowance for central government employees and Dearness Relief for pensioners.
With this decision, the DA rate has increased from 60% to 63% of basic pay, while pensioners will receive the corresponding increase in Dearness Relief. The revised rates are effective from July 1, 2026.
The decision is expected to benefit approximately 48.54 lakh central government employees and 68.71 lakh pensioners.
September Inflation Data Brings New Attention to DA Calculation
The latest AICPI-IW reading is an important factor in estimating the next DA revision. The index increased by 0.9 points in September, indicating a rise in the inflation-linked measure used for calculating Dearness Allowance.
Based on currently available figures, some estimates suggest that DA could reach 65% in January 2027. However, this is only a projection and not an officially approved increase.
How Much Additional Salary Could Employees Receive?
The financial benefit of a DA increase depends on an employee’s basic pay.
For example, an employee with a basic salary of ₹18,000 receives ₹11,340 as DA at the current rate of 63%. If the rate increases to 65%, the DA amount would become ₹11,700, resulting in an additional ₹360 per month.
These figures are illustrative and depend on the final approved DA rate.
When Will the Next DA Hike Be Announced?
The next revision is expected to apply from January 1, 2027, following the government’s regular six-monthly DA revision cycle.
The final percentage will depend on the remaining inflation data and the government’s approval. Until an official announcement is made, employees should treat the expected 65% rate as an estimate rather than a confirmed salary revision.
