8th Pay Commission: With inflation staying firm, the latest AICPI-IW data suggests central government employees and pensioners are set for a dearness allowance hike from January 2026, even as they await the first pay revision under the 8th Pay Commission.
The Ministry of Labour and Employment released the All India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025 at 148.2, a key figure that directly determines the dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners.
The inflation index is used to offset the impact of rising prices on salaries and pensions and forms the basis of the six-monthly DA revision. The revision was due on January 1, 2026, even as employees transition into the framework of the 8th Pay Commission.
With the November reading, the rolling 12-month AICPI-IW average has pushed DA calculations close to the next threshold. Based on the standard formula followed under the 7th Central Pay Commission, DA already reached 59.93% by November 2025, just shy of the 60% mark.
Last DA Hike
The government last raised DA by 4 percentage points, from 54% to 58%, in July 2025. Although the revised DA will take effect from January 1, 2026, the official announcement is expected around March–April 2026, after the December AICPI-IW data is published. Arrears are typically paid retrospectively.
Meanwhile, no revision in basic pay has taken place from January 2026, as the 7th Pay Commission’s tenure ended on December 31, 2025. The 8th Pay Commission, notified in November 2025, is expected to submit its recommendations within about 18 months. Its report, particularly the fitment factor, will determine the next major overhaul of salaries and pensions.
Under existing rules, DA is merged into basic pay and reset to zero only when the new fitment factor is implemented, making the upcoming DA hike an important interim relief for employees and pensioners.
