Central government employees are set for another salary boost as the July 2026 dearness allowance (DA) revision is expected to raise the DA rate by 3%, taking it from the current 60% to 63%. The hike comes under the 7th Pay Commission framework, even as employees await the 8th Pay Commission. The Finance Ministry is yet to make the official announcement, so the figure remains an estimate based on inflation data.
How much is the DA hike?
Based on the latest All India Consumer Price Index for Industrial Workers (AICPI-IW), the DA is expected to rise by 3 percentage points with effect from July 1, 2026. This would move the DA from 60% to 63% of basic pay. The last DA revision, in July 2025, was also a 3% hike.
How the DA is calculated
The government revises DA twice a year, with effect from January 1 and July 1. The revision is based on the 12-month average of the AICPI-IW, which tracks retail inflation faced by industrial workers. For the July 2026 revision, the calculation uses AICPI-IW data from July 2025 to June 2026.
Under the 7th Pay Commission, the formula is:
DA (%) = {[(12-month average AICPI-IW × 2.88) − 261.42] ÷ 261.42} × 100
According to the Labour Bureau, the AICPI-IW reading for June 2026 was 151.9, bringing the 12-month average to about 148.65–149.54 (2016 base year). Applying this to the formula yields roughly 63.7%. Since the government drops the decimal portion, the DA works out to 63%.
Key points at a glance
- Current DA: 60% of basic pay
- Expected DA from July 1, 2026: 63% (a 3% hike)
- Framework: 7th Pay Commission (not the upcoming 8th CPC)
- Basis: 12-month AICPI-IW average, July 2025 to June 2026
- June 2026 AICPI-IW: 151.9 (Labour Bureau)
- Status: expected; official Finance Ministry notification awaited
Who benefits and when
The revised DA applies to central government employees and, as dearness relief (DR), to central pensioners. A higher DA also lifts several linked allowances that are calculated as a percentage of basic pay. The hike is effective from July 1, 2026, so once notified, employees typically receive arrears for the months since that date along with the revised monthly amount.
DA and the 8th Pay Commission
This DA revision is separate from the 8th Pay Commission, whose panel is still to finalise its recommendations. Until the new commission is implemented, DA continues to be revised under the existing 7th CPC formula every six months. Employees should treat the 63% figure as a strong estimate rather than a confirmed number until the Cabinet approves and the Finance Ministry issues the formal order.
For the exact percentage and payout date, watch for the official announcement from the Ministry of Finance.