Central Govt Employees Likely To Get 2% DA Hike from Jan 2026 ahead of 8th CPC

Central Govt Employees Likely To Get 2% DA Hike from Jan 2026 ahead of 8th CPC

The latest data from the Labour Bureau regarding the All-India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025 has cleared the path for the upcoming Dearness Allowance (DA) revision. As of January 2026, central government employees and pensioners are looking at a confirmed increase, with the 12-month average pointing toward a 2% hike

1. AICPIN Data for November 2025: The Numbers

On December 31, 2025, the Ministry of Labour & Employment released the AICPI-IW for November 2025. The index saw a steady climb, which is the primary driver for the DA calculation.

• October 2025 Index: 147.7
• November 2025 Index: 148.2 (+0.5 points)
• Current DA Rate: 58% (Effective since July 2025)

This 0.5-point jump in November is significant. It brings the 12-month average of the consumer price index to a level that mathematically secures a minimum of 60% total DA.

Also Check

DA from January 2026 Calculator

DA Calculation Sheet

2. Why is a 2% Hike “Almost Confirmed”?

The formula for DA is based on a 12-month average of the AICPI-IW. A crucial aspect of this government policy is that fractions of a percent are ignored. Unlike standard mathematics where 0.5 and above is rounded up, the DA calculation only recognizes the whole number.

• Scenario A: If the average results in 60.12%, the DA is 60%.
• Scenario B: Even if the average reaches 60.94%, the DA is still 60%.

Why a 3% Hike is Mathematically Unlikely

To achieve a 3% hike (reaching 61%), the 12-month average would need to cross the 61.00 threshold exactly. Based on the November 2025 index of 148.2:

1. The cumulative index points for the last 11 months are already locked in.
2. If the December 2025 index stays at 148.2, the final calculation sits at approximately 59.94%.
3. Because the government ignores everything after the decimal, this 59.94% is treated as 59% in the interim, but since we are currently at 58%, it confirms a 2% increase to reach the 60% mark.
4. To hit 61%, the December index would need to jump by more than 10 points in a single month—a move that has never occurred in the history of the index.

Confirmed Status for Jan 2026

With the November 2025 figures now public, the 2% hike is essentially “locked.” Even a minor dip in the December inflation data would not be enough to drag the average below the 60.00% threshold, nor is any realistic jump enough to push it to 61%.

Final Expected DA Rate: 60% (a 2% increase from 58%).

3. Impact on Salaries and Pensions

This revision will benefit over 1 crore central government employees and pensioners.¹⁴ Here is a quick look at how a 2% hike (moving from 58% to 60%) affects monthly payouts:

4. The 8th Pay Commission Connection

The January 2026 DA revision is uniquely important because January 1, 2026, marks the theoretical start date for the 8th Central Pay Commission (CPC) cycle.

Traditionally, when a new Pay Commission is implemented:

• The existing DA (which will be 60%) is merged into the Basic Pay.
• The DA is reset to 0% for the new pay scale.
• While the 8th CPC implementation is still in its early stages, this 60% figure serves as the final “inflation buffer” that will determine the Fitment Factor (the multiplier used to jump from 7th CPC to 8th CPC salaries).

Conclusion & Timeline

While the data confirms a 2% hike is the most realistic outcome, the official announcement from the Union Cabinet is expected in March 2026. Once announced, the hike will be applied retrospectively from January 1, 2026, and employees will receive arrears for the preceding months.

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