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Centre Expected to Raise Dearness Allowance by 3% Before Diwali, Taking It to 58%

The inflation-indexed revision is based on the Labour Bureau’s CPI-IW formula.

Overview

  • Reports and analyst notes point to an October announcement window, likely just before Diwali, with dues payable from July 1, 2025.
  • A rise from 55% to 58% would cover roughly 1.2 crore central employees and pensioners, lifting monthly pay and Dearness Relief.
  • The previous adjustment for January–June 2025 was 2%, taking the rate to 55% in what was the smallest increase in over six years.
  • Under the 7th Pay Commission, these cost-of-living adjustments are issued twice a year, and its term runs through December 31, 2025.
  • The 8th Pay Commission was announced in January 2025 but remains unconstituted, and some analysts expect implementation only in late 2026 or 2027.