DA Revision Explained: Know Why January 2026 Hike Matters
DA Hike: The Ministry of Labour and Employment has released the All India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025. The index stands at 148.2. This figure serves as the basis for determining the Dearness Allowance (DA) for central government employees and pensioners, ensuring that the real value of their salaries or pensions is not eroded by inflation.
Why the DA revision in January 2026 is important: The next revision of the Dearness Allowance (DA) is scheduled for January 2026. This is a regular process that takes place every six months. Prior to this, in July 2025, the government had increased the DA from 54 percent to 58 percent.
Now, employee organizations believe that the upcoming revision could see a 3 to 5% increase in Dearness Allowance (DA), provided the All India Consumer Price Index for Industrial Workers (AICPI-IW) for December 2025 remains around 147 to 148.
What are the employee organizations predicting?
Manjeet Singh Patel, president of the All India NPS Employees Federation, says that if the AICPI-IW for December 2025 is considered to be 147, then a DA increase of approximately 3% is likely for central government employees.
According to him, if the December AICPI-IW remains around the November 2025 level of 148.2, then a DA increase of up to 5% is possible.
What is the formula for calculating DA?
Patel has explained the official formula for calculating Dearness Allowance (DA) with examples:
DA (%) = [{(Average AICPI-IW of the last 12 months × 2.88) − 261.41} / 261.41] × 100 − Existing DA (%)
First example: If the AICPI-IW is 148.2, the calculation for Dearness Allowance is as follows: Multiplying 148.2 by 2.88 gives 426.81. Subtracting 261.41 from this value leaves 165.4.
Dividing this by 261.41 gives a result of 0.63, which, when multiplied by 100, results in a total DA of 63 percent. After deducting the existing 58% DA, this represents an increase of approximately 5%.
Second Example: If the AICPI-IW is 147, multiplying 147 by 2.88 gives 423.36. Subtracting 261.41 from this value leaves 161.95.
Dividing this by 261.41 gives a result of 0.61, which, when multiplied by 100, results in a total DA of approximately 61%. After deducting the existing 58% DA, in this case, the Dearness Allowance would increase by approximately 3%.
