DA Update: Central government employees and pensioners may receive great news at the beginning of 2026.  Amidst the formation of the 8th Pay Commission, a major update has emerged regarding the Dearness Allowance (DA). A report from the All India NPS Employees Federation has raised significant hopes. The report suggests that this time, a 3% to 5% increase in DA is possible.

Why will the DA increase?

The Ministry of Labour and Employment released the Consumer Price Index (AICPI-IW) figures for November 2025, which reached 148.2. According to the All India NPS Employees Federation, if the December 2025 figure falls to 147, a 3% increase is certain. However, if the December figure remains close to 148.2, similar to November, employees could receive a 5% increase.

Increase in Take-Home Salary!

Currently, central government employees receive DA at a rate of 58%. If these predictions prove true, the figure will reach between 61% and 63%. This will result in a significant increase in the take-home salary and pension of millions of employees and pensioners.

What is DA?

Dearness Allowance (DA) is the money that the government provides to its employees and pensioners to cope with rising inflation. As the prices of essential commodities like milk, pulses, and petrol increase in the market, a gap is created between salary and the cost of living. To bridge this gap, the government adds a fixed rate to the basic pay, which is called DA. The amount of DA depends entirely on the figures of the All India Consumer Price Index. The calculation of DA is different for urban and rural areas. Also, what retired employees receive is called Dearness Relief instead of Dearness Allowance. The 8th Pay Commission is also awaited.

The term of the 7th Pay Commission ended on December 31, 2025. Now all eyes are on the 8th Pay Commission, which was constituted in November 2025. The commission will now submit its recommendations within 18 months, which could include major announcements such as the fitment factor and the merger of DA with basic pay.

Currently, it can be said that everything hinges on the December inflation figures. If the current level of inflation persists, this could prove to be the biggest New Year's gift of the year for central government employees.

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