The Labour Bureau has released the All-India Consumer Price Index for Industrial Workers (CPI-IW) for October 2025 setting the index at 147.7 points. This new data offers a reliable hint of what central government employees and pensioners can expect in the next Dearness Allowance (DA) and Dearness Relief (DR) revision — effective from January 1, 2026.
CPI-IW Data Signals Moderate Rise
Based on the 2016=100 series, the index shows a slight increase from the previous month. When translated through the standard DA formula used by the Ministry of Finance, this trend suggests a likely 2%–3% hike in DA/DR.
The final figure will depend on the average CPI-IW values for November and December 2025 but current projections indicate that DA may reach around 48%–49% of basic pay and pension.
What This Means for Central Government Employees
- In-hand pay boost: The expected increase will directly raise take-home pay and pension from January 2026.
- Allowance revision link: Once DA crosses 50%, some allowances (such as HRA and TA) are automatically revised upward under existing rules.
- Impact on pensioners: DR increase will benefit about 60 lakh central government pensioners.
No DA–DR Merger Yet
While the 8th Central Pay Commission has been constituted, the government has not proposed merging DA/DR with basic pay yet. The Ministry of Finance confirmed in Parliament that DA/DR continues to be revised every six months based on CPI-IW trends.
View earlier post in this regard : 8th Pay Commission Update: Will DA/DR Be Merged with Basic Pay?
Why the CPI-IW Matters
The Consumer Price Index for Industrial Workers (CPI-IW) is compiled monthly by the Labour Bureau tracking retail inflation for households with industrial incomes. It forms the backbone of DA/DR calculations and ensures that salary and pension values keep pace with inflation.
When the Official Announcement Will Come
The final DA/DR hike for January 2026 will be formally notified in March 2026 after Cabinet approval. Once notified, it will apply retrospectively from 1 January 2026 and arrears will be paid accordingly.
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