With the 7th Pay Commission nearing its end in December 2025, central government employees and pensioners are eagerly awaiting news on the final Dearness Allowance (DA) hike under the current structure. Amid rising inflation and a steadily growing Consumer Price Index for Industrial Workers (CPI-IW), experts predict a 3% increase in DA—offering timely financial relief just ahead of the festive season.
DA Hike Expected Before Diwali 2025
The All-India CPI-IW for June 2025 rose to 145, pushing the 12-month average index to 143.6. Based on the established formula, this supports a DA increase from the current 55% to 58%. Although the effective date for the hike is July 1, it is widely expected to be announced around Diwali—continuing the government’s tradition of festive-time disbursements.
Impact on Salary: DA Hike Calculation
Under the 7th Pay Commission, the fitment factor remains at 2.57, which determines how basic pay is multiplied to compute the final salary. Here’s how the DA revision will affect the salary of entry-level employees
Salary Comparison Table: Before and After DA Hike
| Component | Current (July 2025) | Expected (Post DA Hike) |
|---|---|---|
| Basic Pay (Entry Level) | ₹18,000 | ₹18,000 |
| DA Rate | 55% | 58% |
| DA Amount | ₹9,900 | ₹10,440 |
| Total Monthly Salary | ₹27,900 | ₹28,440 |
So, a central government employee with a basic pay of ₹18,000 will see a salary increase of ₹540 per month after the DA hike.
8th Pay Commission Update
Although the 8th Pay Commission was notified in January 2024, its implementation is not expected until mid-2027. Typically, such commissions require about two years for formation, data analysis, recommendations, and cabinet approval. The 7th Pay Commission will officially remain in force until December 2025.
Conclusion
The expected 3% DA hike—possibly the last under the 7th Pay Commission—comes as a welcome move for government employees and pensioners ahead of the festive season. This increment not only boosts current earnings but also lays the groundwork for future salary benchmarks under the upcoming 8th Pay Commission. Employees are advised to stay tuned to official announcements for confirmation.
FAQs
When will the new DA hike be officially implemented?
The hike will be effective from July 1, 2025, but the announcement is expected around Diwali 2025.
How much is the DA likely to increase?
The DA is expected to rise from 55% to 58%, based on the latest CPI-IW data.
What will be the salary impact of the 3% DA hike?
An entry-level employee with a basic pay of ₹18,000 will get an additional ₹540 per month.
Has the 8th Pay Commission started functioning?
It was notified in January 2024, but its recommendations are unlikely before mid-2027.
Is this the last DA hike under the 7th Pay Commission?
Yes, this is likely to be the final DA revision before the 7th Pay Commission ends in December 2025.