Central government employees' dearness allowance estimated to soar to 64% on July AICPI-IW reading

The estimated dearness allowance (DA) for central government employees reached 64% as the Labour Bureau released the All India Consumer Price Index -Industrial Workers (AICPI-IW) reading for July 2026. The July AICPI reading stood at 153.2, as per a statement from the Labour Bureau. It is 1.3 points up from June’s inflation reading of 151.9.

The July AICPI-IW reading brought the 12-month average inflation to approximately 149.21, which took the DA to approximately 64.38%. Since the government calculates DA in round figures, a DA of 64.38% may be rounded to 64%.

“The All-India CPI-IW for July 2026 increased by 1.3 points and stood at 153.2 points (one hundred fifty-three point two). Year-on-year inflation for the month of July 2026 stood at 4.57% as compared to 2.66% in July, 2025,” says the Labour Bureau.

The Labour Bureau compiles AICPI-IW every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country.

When is DA revised for central government employees?

DA is revised twice a year for central government employees- January and June. However, the announcement for the DA hike can be made months later, mostly near a festival.

As per the 12-month AICPI reading, the estimated DA for June 2026 stood at 63%.

However, the actual DA rate will be known only after the government makes an announcement. It is yet to announce the June 2026 DA hike.

AICPI-IW index reading from August 2025-July 2026 and DA

Month Index Value Aug-25 147.1 - Sep-25 147.3 +0.2 Oct-25 147.7 +0.4 Nov-25 148.2 +0.5 Dec-25 148.2 0 Jan-26 148.6 +0.4 Feb-26 148.5 -0.1 Mar-26 149.1 +0.6 Apr-26 149.9 0.8 May-26 150.8 0.9 Jun-26 151.9 1.1 Jul-26 153.2 1.3 Average 149.20833 Estimated DA 64.38%= 64%

How is DA for central government employees calculated?

DA is calculated based on a formula-DA% = [{12-month average of AICPI-IW (base year 2001)– 261.42}/261.42x100]However, we will first have to link the 2016 base values to the 2001 base values by multiplying it by 2.88.The factor of 2.88 is arrived at to equate the latest base year (2016) to 2001. Labour Bureau data shows that for August 2020, the value of CPI-IW under the old base (2001=100) was 33.8 and CPI-IW under the new base (2016=100) was 117.4, so the factor is calculated as 338 ÷ 117.4= 2.88.

What is the DA rate as per July 2026 AICPI-IW reading?

DA%= (153.2X2.88)– 261.42}/261.42x100]= (429.72-261.42)/(261.42)X100= .6437X100= 64.37%= 64%

How can 64% DA help increase the salary of central government employees?

The current DA rate is 60% since the government is yet to announce the June DA rate. Let’s compare the estimated monthly salary hike at 60% and 64% DA rates.

Pay Level Minimum Basic Pay (₹ per month) DA amount (at 60%) DA amount (at 64%) Salary hike per month Level 1 ₹ 18,000 ₹ 10,800 ₹ 11,520 ₹ 720 Level 2 ₹ 19,900 ₹ 11,940 ₹ 12,736 ₹ 796 Level 3 ₹ 21,700 ₹ 13,020 ₹ 13,888 ₹ 868 Level 4 ₹ 25,500 ₹ 15,300 ₹ 16,320 ₹ 1,020 Level 5 ₹ 29,200 ₹ 17,520 ₹ 18,688 ₹ 1,168 Level 6 ₹ 35,400 ₹ 21,240 ₹ 22,656 ₹ 1,416 Level 7 ₹ 44,900 ₹ 26,940 ₹ 28,736 ₹ 1,796 Level 8 ₹ 47,600 ₹ 28,560 ₹ 30,464 ₹ 1,904 Level 9 ₹ 53,100 ₹ 31,860 ₹ 33,984 ₹ 2,124 Level 10 ₹ 56,100 ₹ 33,660 ₹ 35,904 ₹ 2,244

As you can see, high monthly salary hikes can be experienced more at high levels. However, the real hike will be known after the government announcement of DA.