Central government employees and pensioners can look forward to an increase in Dearness Allowance (DA) and Dearness Relief (DR) starting January 2026. The current DA rate stands at 58 percent, which has been in place since July 2025.
Based on the November 2025 data, calculations show the DA has reached around 59.93 percent. This points to a likely rise to 60 percent from January 2026, meaning a 2 percent increase. The final figure will depend on the December 2025 index, but trends suggest the hike is almost certain.
This adjustment will bring direct benefits to salaries and pensions for millions of people. The change comes as part of regular updates to help with rising living costs.
Why the Dearness Allowance is Increasing
Dearness Allowance helps government employees cope with inflation. It gets calculated using the All India Consumer Price Index for Industrial Workers (AICPI-IW). The Labour Ministry released the November 2025 index at 148.2 points.
This is 0.5 points higher than the previous month and marks the fifth straight month of increase. According to groups tracking these numbers, the current trend puts the DA very close to 60 percent.
The government rounds DA to the nearest whole number when announcing it. Even if the December index stays the same or changes slightly, the 60 percent level looks secure.
How Much Extra Will Employees Get in Salary
If DA goes from 58 percent to 60 percent in January 2026, employees will get an extra 2 percent on their basic pay each month. This amount adds directly to the take-home salary. Arrears from January onward will also be paid later.
Pensioners will receive the same increase through Dearness Relief, boosting their monthly pension. Here are some examples of the monthly extra amount based on different basic pay levels:
| Basic Pay (in Rupees) | Current DA Amount (58%) | New DA Amount (60%) | Monthly Extra Amount |
|---|---|---|---|
| 40,000 | 23,200 | 24,000 | 800 |
| 50,000 | 29,000 | 30,000 | 1,000 |
| 60,000 | 34,800 | 36,000 | 1,200 |
| 70,000 | 40,600 | 42,000 | 1,400 |
| 80,000 | 46,400 | 48,000 | 1,600 |
Employees with higher basic pay will see larger monthly gains. The increase applies proportionally across all levels.
What is Dearness Allowance
Dearness Allowance is an extra payment from the government to its employees to offset rising prices of everyday items like food, fuel, and housing. As these costs go up, the buying power of fixed salaries goes down. DA helps maintain that value by adding a percentage to the basic pay.
For retired employees, it is called Dearness Relief. The calculation uses the average AICPI-IW index over six months – July to December for the January update, and January to June for the July update. The government reviews and adjusts it twice a year.
This system ensures that salaries and pensions keep pace with inflation over time.
Update on the 8th Pay Commission
The 7th Pay Commission’s term ended on December 31, 2025. The government formed the 8th Pay Commission in November 2025. It has 18 months to submit its recommendations.
These may cover changes to the fitment factor, salary structure, and how DA gets merged into basic pay. For now, the January 2026 DA increase follows the rules of the 7th Pay Commission.
Once the 8th Pay Commission recommendations take effect, larger changes could come, possibly with arrears starting from January 2026.
The upcoming DA hike remains tied to the current system until new rules apply.
Conclusion
Central government employees and pensioners are likely to see their Dearness Allowance rise by 2 percent to 60 percent from January 2026. This is based on the November 2025 AICPI-IW index of 148.2 and ongoing trends.
The increase will add to monthly salaries and pensions, providing relief against inflation. The exact rate depends on the December 2025 index, with the official announcement expected in March or April 2026. Arrears will be paid from January onward.