DA hike: Will government employees get a 3% increase this June? What new data reveals
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April inflation data sparks hopes of a DA hike
The Labour Bureau has released the April 2026 All India Consumer Price Index for Industrial Workers (AICPI-IW) data, which is used to calculate Dearness Allowance (DA) for central government employees. While the final DA rate will depend on May and June 2026 data, current trends indicate a possible 3% increase.
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AICPI-IW rises to 149.9 in April 2026
According to the Labour Bureau, the All-India Consumer Price Index for Industrial Workers (2016=100) increased from 149.1 in March 2026 to 149.9 in April 2026. Retail inflation for industrial workers also rose to 4.46% from 4.27% in the previous month.
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How does AICPI-IW affect DA calculation?
Dearness Allowance for central government employees is calculated using the average AICPI- IW data for the preceding 12 months. For the June 2026 DA revision, the government will consider the average index from July 2025 to June 2026.
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What is the current DA rate?
The central government announced a 2% DA hike in April 2026, effective from January 2026. Following the increase, the DA rate for central government employees and pensioners reached 60%.
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What does the latest 12-month AICPI-IW average indicate?
The average AICPI-IW reading for the 12 months from May 2025 to April 2026 stands at 147.51.
For DA calculation, the 2016-base AICPI-IW series is linked to the 2001-base series by multiplying it by 2.88.
The factor of 2.88 is derived from Labour Bureau data, where the CPI-IW value for August 2020 was 338 under the 2001 base and 117.4 under the 2016 base. Conversion factor = 338 ÷ 117.4 = 2.88
For DA calculation, the 2016-base AICPI-IW series is linked to the 2001-base series by multiplying it by 2.88.
The factor of 2.88 is derived from Labour Bureau data, where the CPI-IW value for August 2020 was 338 under the 2001 base and 117.4 under the 2016 base. Conversion factor = 338 ÷ 117.4 = 2.88
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Why are government employees expecting a 3% DA hike?
Using the DA formula and the latest 12-month average AICPI-IW of 147.51:
● 147.51 × 2.88 = 424.83
● DA = 62.51%, which rounds off to 63%
Since the current DA rate is 60%, the calculation indicates a possible 3% DA hike. However, the final rate will depend on AICPI-IW data for May and June 2026 and government approval.
● 147.51 × 2.88 = 424.83
● DA = 62.51%, which rounds off to 63%
Since the current DA rate is 60%, the calculation indicates a possible 3% DA hike. However, the final rate will depend on AICPI-IW data for May and June 2026 and government approval.
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How much can a 3% DA hike increase salary?
Consider a Level 5 central government employee with a basic salary of Rs 29,200.
● At 50% DA, salary = Rs 43,800
● At 53% DA, salary = Rs 44,676
In this example, a 3% DA increase raises monthly salary by Rs 876. The actual impact will vary depending on the employee's basic pay level.
● At 50% DA, salary = Rs 43,800
● At 53% DA, salary = Rs 44,676
In this example, a 3% DA increase raises monthly salary by Rs 876. The actual impact will vary depending on the employee's basic pay level.