News India Live, Digital Desk: Da Hike: The July 2025 dearness allowance (DA) amendment for central employees and pensioners is going to be disappointing. Recently, dearness allowance increased by only 2 percent, while the first three to four percent increase was common. This slight increase is a major economic shock for about 1.2 crore employees and pensioners.
Why will the dearness allowance not increase in July?
The main reason behind not increasing the DA in July 2025 is the decline in the data of All India Consumer Price Index (AICPI-IW). The AICPI data of January and February 2025 has been recorded decreased, indicating that the possibility of increasing dearness allowance in July is almost over.
Decline in AICPI data
According to the AICPI released by the Ministry of Labor and Employment, the index declined 0.4 points to 142.8 in February 2025, compared to 143.2 in January. The inflation rate has also declined on an annual basis, which declined from 4.9% in February 2024 to 2.59% in February 2025. Retail inflation has reached a five -year low of 3.34% in March 2025.
What can happen in the coming months?
Inflation is expected to continue to fall in March and April. If this trend remains intact for the next four months, the increase in DA of central employees in July may be zero percent or less than 2%.
How is the dearness allowance fixed?
Average of the last six months of AICPI issued by the Labor Bureau is taken to decide the dearness allowance. DA amendments take place every year in January and July. Current Calculation Formula of DA:
DA = (AICPI average of last 12 months × 2.88 – 261.4) × 100 / 261.4
Impact on central employees
The non -increase in DA will affect the financial condition of the employees. These employees will feel economic pressure due to lack of necessary increase in their income, despite increasing cost of living.
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