The Ministry of Labour and Employment has released the All India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025 at 148.2—a key metric in determining the upcoming dearness allowance (DA) revision for Central Government employees and dearness relief (DR) for pensioners.

The index, used to shield salaries and pensions from inflation, forms the basis of the biannual DA adjustment, the next of which becomes applicable from January 1, 2026 under the 8th Pay Commission cycle.

Why the November AICPI-IW reading is crucial

The November data point has nudged the 12-month average AICPI-IW close to the next DA slab. Under standard calculations of the 7th Central Pay Commission (CPC), DA touched 59.93% by November, leaving it just shy of the 60% threshold.

With only December’s inflation number pending, projections show that even moderate movement in the index would still push DA above 60%. Since the government finalises DA in whole numbers, this signals a likely 2% hike—from 58% to 60%—effective January 2026.

Possibility of a higher DA hike

Employee bodies believe the increase could be larger if inflation stays elevated in December.

Simulations indicate:

  • December index around 146–147 → DA may reach 61%
  • December index around 148 → DA could climb to 63%

The final figure will depend on the Labour Ministry's official December release.

Where DA stands now and what’s next

The Centre last revised DA in July 2025, increasing it from 54% to 58%.

The new DA, effective from January 1, 2026, is expected to be formally announced only in March–April 2026, once the December index is published. Arrears will be paid retrospectively.

Pay Commission update

The 7th Pay Commission term ended on December 31, 2025 with no change in basic pay.

The 8th Pay Commission, constituted in November 2025, is expected to submit its report in about 18 months. The panel’s recommendations—particularly the fitment factor—will determine the next overhaul of pay and pension structures.

Under existing rules, DA is merged with basic pay and reset to zero only when the new fitment factor comes into force.