Now Reading: DA hike formula explained as employees seek overhaul for 8th CPC
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DA hike formula explained as employees seek overhaul for 8th CPC
Nearly 1.15 crore central government employees and pensioners receive dearness allowance (DA), which is revised twice a year based on the 12-month average of the All India Consumer Price Index for Industrial…
The Story in Brief
Nearly 1.15 crore central government employees and pensioners receive dearness allowance (DA), which is revised twice a year based on the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW). The 7th Pay Commission formula uses a base of 261.42 points to calculate the percentage. DA was last hiked 2% in April 2026, bringing it to 60% of basic salary.
The All India Defence Employees’ Federation has urged the 8th Pay Commission panel to change the calculation, arguing the current index underweights food and essentials that lower-paid employees spend more on. A second DA hike this year is possible as a 'Diwali gift' around October or November, following a 3% hike in October 2025, but final confirmation depends on AICPI data and government approval.
The Indian Opinion
The demand by the All India Defence Employees’ Federation for a new cost-of-living index is not just a bureaucratic quibble. The current AICPI-IW weights food at only 36.75%, yet for lower-paid staff, food and rent consume far more of their income. Before the 8th Pay Commission finalises its report, it must test whether the index actually protects purchasing power of the lowest-paid. If inflation for a clerk is systematically understated, the DA formula is broken at the core.
Source: livemint.com
This story was synthesised by AI from the source linked above.
