The Labour Bureau, Ministry of Labour and Employment, has released the All-India Consumer Price Index for Industrial Workers (AICPI-IW) for May 2026, providing a strong indication of the upcoming Dearness Allowance (DA) and Dearness Relief (DR) revision effective 1 July 2026 for Central Government employees and pensioners.
AICPI-IW for May 2026
According to the latest data, the AICPI-IW increased by 0.9 points, rising from 149.9 in April 2026 to 150.8 in May 2026. This increase takes the 12-month average index to approximately 148.08.
Based on the 7th Central Pay Commission formula, the calculated DA works out to 63.14%.
Expected DA Rate
Since DA is announced in whole numbers, the decimal value is ignored. Therefore, the projected Dearness Allowance stands at 63%.
As the existing DA rate is 60%, employees and pensioners are expected to receive a 3% increase for the July–December 2026 period.
Why a 4% Increase Is Unlikely
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For the DA to increase to 64%, the June 2026 AICPI-IW would need to rise sharply to around 154.5 points, which appears unlikely based on current trends. As a result, a 3% DA hike remains the most probable outcome.
Estimated Increase in Monthly DA
A 3% increase in DA would result in the following approximate monthly benefit:
Pay Level Basic Pay Additional DA (3%)
Level 1 ₹18,000 ₹540
Level 4 ₹25,500 ₹765
Level 6 ₹35,400 ₹1,062
Level 7 ₹44,900 ₹1,347
Level 10 ₹56,100 ₹1,683
Level 13 ₹1,18,500 ₹3,555
In addition, the Transport Allowance (TA) linked to DA is also expected to increase proportionately.
Expected Timeline
Although the revised DA will be effective from 1 July 2026, the official approval by the Union Cabinet and notification by the Department of Expenditure are expected around September or October 2026.
Employees and pensioners will receive the difference for July, August, and September as DA arrears, which are likely to be paid along with the salary following the official announcement.
