DA hike for central government employees: Can Finance Ministry announce dearness allowance this week? Experts weigh in

It has been nearly a month since the Labour Bureau announced the All India Consumer Price Index (AICPI) reading for June 2026. The reading determines the DA rate, which is estimated to go up to 63% for June after a 3% hike. However, central government employees have still been waiting for the DA hike announcement from the Ministry of Finance.

Confederation of Central Government Employees & Workers (CCGEW) secretary general MS Vengatesan, in his letter to the Ministry of Finance last week, had also requested the government to initiate the process of DA announcement. Amid such a demand from central government employees, can the ministry announce the DA hike this week?

Manjeet Singh Patel, president, All India New Pension Scheme Employees’ Federation, told ET Wealth that the DA announcement is likely to happen within a week.


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A source from the All India Defence Employees’ Federation, on the condition of anonymity, also told ET Wealth Online that the announcement is expected any time this week as the file is in process.

A prominent official from the CCGEW also said that the DA hike announcement can probably happen in the first week of October.

What does history say about the DA hike announcement?

The government mostly announce the June DA hike ahead of a festival such as Dussehra. However, it is not an established practice as on the last two occasions, the announcements came after Dussehra. Last year, Dussehra fell on October 2, and the DA was announced on October 6. In 2024, Dussehra was on October 12, and the DA announcement came on October 21. This year, Dussehra is on October 20, so can the government announce it a bit earlier this time?

Govt order date	DA rate (%)	DA hike (%)
April 22, 2026	60%	2%
October 6, 2025	58%	3%
April 2, 2025	55%	2%
October 21, 2024	53%	3%
March 12, 2024	50%	4%
October 20, 2023	46%	4%
April 3, 2023	42%	4%
October 3, 2022	38%	4%
March 31, 2022	34%	3%
October 25, 2021	31%	3%

Source: Ministry of Finance

Can DA hike be 3% or 4% for central government employees?

It will be known at the time of the government’s announcement, but the DA is calculated at the 12-month average reading of the AICPI issued by the Labour Bureau at the end of every month.

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For the current DA hike, the average reading taken into account will be from July 2025 to June 2026. The 12-month average reading for that period is 148.65.

If we calculate using the DA formula, the DA for the June month can be approximately 63.76%. Since the government takes the round figure, it is expected to be 63%.

Month	Index Value
Jul-25	146.5
Aug-25	147.1
Sep-25	147.3
Oct-25	147.7
Nov-25	148.2
Dec-25	148.2
Jan-26	148.6
Feb-26	148.5
Mar-26	149.1
Apr-26	149.9
May-26	150.8
Jun-26	151.9
Average	148.65
DA	63.76%= 63%

AICPI reading source: Labour Bureau

DA calculation formula

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.

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Expected DA for June 2026

DA%= (148.65X2.88)– 261.42}/261.42x100]

= (428.12-261.42)/(261.42)X100

= .6376X100

= 63.76%= 63%

However, we need to wait for the government announcement to know whether the DA for June 2026 will be 63%?