AICPI-IW Jumps to 144: Decoding the July 2025 DA/DR Hike for Central Employees

Central Government employees and pensioners! While the wait for the 8th Pay Commission’s Terms of Reference continues, a significant hike in Dearness Allowance (DA) and Dearness Relief (DR) is on the horizon, effective from July 2025.

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Expected DA/DR Hike: What to Anticipate

The All India Consumer Price Index for Industrial Workers (AICPI-IW), the key benchmark for DA/DR revisions, saw a 0.5-point jump to 144 in May 2025. This marks the third consecutive month of an upward trend, strengthening the case for a substantial increase.

While the official announcement and final percentage are still pending, various reports are projecting a DA hike of around 3%. If approved, this would push the DA/DR rate to 58% of basic salary and pension, respectively. This likely also marks the last DA/DR increase before the 8th Pay Commission’s recommendations come into play.

The exact hike depends on the AICPI-IW data for June 2025, with the calculation following the recommendations of the 7th Pay Commission.

When to Expect the Announcement

Although the DA hike is effective from July 1, 2025, the government typically announces these revisions later in the year. Employees and pensioners can generally expect the official notification during or at the start of the festival season, around September-October.

This anticipated hike offers welcome relief against inflation, providing a boost to the financial well-being of Central Government employees and pensioners.