DA hike announcement: How salaries of Level 1-18 employees will rise after 2% dearness allowance hike

The long wait of central government employees for the dearness allowance hike (DA hike) ended today (Saturday, April 18 2026), with the Cabinet approving a 2% increase. This means the DA will rise from its current rate of 58% to 60%. Additionally, dearness relief (DR) for pensioners has also been increased from 58% to 60%. This announcement is effective from January 2026 and both central government employees and pensioners will get arrears from the back date.

In a statement on Saturday, the Ministry of Finance said: "The Union Cabinet chaired by Prime Minister Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners w.e.f. January 1, 2026, representing an increase of 2% over the existing rate of 58% of the basic pay/pension, to compensate against price rise."

"The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be Rs 6791.24 crore per annum. This will benefit about 50.46 lakh central government employees and 68.27 lakh pensioners," the Ministry's release said further.




This news comes after the National Council–Joint Consultative Machinery (NC-JCM), top central government employee body in India, wrote a letter to the cabinet secretary, requesting him to intervene in the DA hike announcement. The DA hike will be applicable under the 7th Pay Commission as the 8th Pay Commission is yet to be implemented.

Also Read: 8th Pay Commission demands for pensioners: One rank one pension, gratuity up to Rs 75 lakh; 10 things key employee body has demanded

Now, let's find out how much of a monthly salary increase central government employees can expect following the 2% DA hike.

Monthly salary increases after 2% DA hike

Pay Level	Basic Pay	Current Pay (at 58% DA)	Salary at 60% DA	Monthly increase in salary
Level 1	₹ 18,000	₹ 28,440	₹ 28,800	₹ 360
Level 2	₹ 19,900	₹ 31,442	₹ 31,840	₹ 398
Level 3	₹ 21,700	₹ 34,286	₹ 34,720	₹ 434
Level 4	₹ 25,500	₹ 40,290	₹ 40,800	₹ 510
Level 5	₹ 29,200	₹ 46,136	₹ 46,720	₹ 584
Level 6	₹ 35,400	₹ 55,932	₹ 56,640	₹ 708
Level 7	₹ 44,900	₹ 70,942	₹ 71,840	₹ 898
Level 8	₹ 47,600	₹ 75,208	₹ 76,160	₹ 952
Level 9	₹ 53,100	₹ 83,898	₹ 84,960	₹ 1,062
Level 10	₹ 56,100	₹ 88,638	₹ 89,760	₹ 1,122
Level 11	₹ 67,700	₹ 1,06,966	₹ 1,08,320	₹ 1,354
Level 12	₹ 78,800	₹ 1,24,504	₹ 1,26,080	₹ 1,576
Level 13	₹ 1,23,100	₹ 1,94,498	₹ 1,96,960	₹ 2,462
Level 13A	₹ 1,31,100	₹ 2,07,138	₹ 2,09,760	₹ 2,622
Level 14	₹ 1,44,200	₹ 2,27,836	₹ 2,30,720	₹ 2,884
Level 15	₹ 1,82,200	₹ 2,87,876	₹ 2,91,520	₹ 3,644
Level 16	₹ 2,05,400	₹ 3,24,532	₹ 3,28,640	₹ 4,108
Level 17	₹ 2,25,000	₹ 3,55,500	₹ 3,60,000	₹ 4,500
Level 18	₹ 2,50,000	₹ 3,95,000	₹ 4,00,000	₹ 5,000

How is DA calculated?

DA is calculated on the basis of the 12-month average reading of All India Consumer Price Index-Industrial Workers (AICPI-IW). For the January 2026 DA hike, the average reading of January 2025-December 2025 has been taken into account.

What was the AICPI-IW average inflation for January-December 2025?

The average of AICPI-IW inflation for the 12 months (from January 2025-December 2025) was 145.54.



What is the formula to calculate DA?

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 determined 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.

DA calculation for January 2026

DA %= (145.54X2.88)– 261.42}/261.42x100]

= 419.15-261.42/261.42X100

= 0.6033X100= 60.33%

Since the government takes round figures, a 60.33% DA means 60%.