New Delhi, July 13 -- The Finance Ministry in April announced 2% increase in Dearness Allowance (DA) for central government employees and pensioners, with effect from 1 January 2026, effectively taking DA to 60% of basic pay from 58%.

Notably, the 2% DA hike is calculated on the 12-month average formula as per the method prescribed by the 7th pay commission using AICPI data. Under this CPC, there have been 10 hikes since 2021, with the highest at 11% in July 2021. The past two hikes were 2% and 3%, respectively, for January and July 2025.

As per the usual timeline, the 8th pay commission (8th CPC) is expected to submit its final recommendations around 18 months after its constitution which means that the earliest, we can expect an annou...