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DA Hike for January 2026 Latest Update- Has the Government Announced a Dearness Allowance Increase? Central government employees and pensioners are eagerly awaiting the government's announcement regarding dearness allowance (DA) and dearness relief (DR) for January 2026. Usually, the government announces this before major festivals like Holi. But this time, even after Holi has passed, there is still no news on DA and DR for government employees and pensioners. Let's discuss this in detail…

DA Hike for January 2026
The government announces DA hikes twice a year – one for January and the other for July. However, the announcement cannot be made in the same month. It could be before a major festival. However, there is no fixed date for the announcement, and they may delay it. For January 2026, the DA increase is likely to be 2%. It is calculated based on the 12-month average reading of the All India Consumer Price Index Industrial Workers (AICPI-IW). The DA for January 2026 was calculated after the December 2025 AICPI readings. However, the exact DA amount will only be known after the government's announcement.

Why is a DA increase necessary for government employees?
An increase in DA helps government employees adjust their basic salary to rising inflation. They receive a DA increase as a percentage of their basic salary. An employee's basic salary remains the same throughout the Pay Commission and before the implementation of the next Pay Commission. During this period, DA is one of the most effective ways to increase salary. Pensioners receive DR, which increases their pay twice a year.

How does the AICPI-IW reading help determine a DA increase?

The AICPI-IW is a monthly index that measures the relative changes in retail prices of a fixed basket of goods and services consumed by industrial workers over a period of time. The Labour Bureau of the Ministry of Finance releases monthly data. The 12-month average reading is used to calculate DA and DR for employees and pensioners across India.

Formula to calculate DA:
DA% = [{12-month average of AICPI-IW (base year 2001) 261.42}/261.42 × 100]

However, we must first link the 2016 base value to the 2001 base value by multiplying it by 2.88.

The 2.88 factor is used to align the latest base year (2016) with 2001. Labor Bureau data shows that for August 2020, the CPI-IW value under the old base (2001=100) was 33.8, and under the new base (2016=100), the CPI-IW value was 117.4. Therefore, the factor is calculated as 338 ÷ 117.4 = 2.88.

What is the AICPI-IW average inflation for the last 12 months?
As per the December 2025 data, the AICPI-IW was 148.2, which was 0.5 percent higher than the November data. If we consider the 12-month average, the AICPI-IW average for January 2025 (from January 2025 to December 2025) is 145.54.

What will be the estimated DA rate for January 2025?

If we factor in average inflation into the DA calculation formula,

Percentage DA = (145.54 x 2.88) 261.42 / 261.42 x 100]

= 419.15 - 261.42 / 261.42 x 100

= 0.6033 x 100 = 60.33%

Since the government rounds the figure, 60.33% DA means 60%.

This means that DA will increase from the current rate of 58% to 60%.

However, we will have to wait for the government's announcement to know the actual DA increase.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.