- By Shreyansh Mangla
- Fri, 22 Aug 2025 07:50 PM (IST)
- Source:JND
Diwali DA Hike: The festival of lights, Diwali, is just months away, and the Central government is preparing for a Diwali gift to all its employees. According to media reports, the government is expected to hike the Dearness Allowance (DA) of Central employees to support the rising cost of living. If reports are to be believed, the government is likely to hike the DA by the end of October, coinciding with the festive season.
DA Hike 2025: Here are some of the most frequently asked questions about DA, its importance, and how it's calculated.
DA Hike: How much will the salary increase?
The DA is expected to increase by 3 to 4 per cent, raising it from the current 55% to either 58% or 59% of a government employee's total basic salary. This adjustment is meant to help employees and pensioners maintain their purchasing power in the face of inflation. For a government employee with a basic pay of Rs 18,000, the salary could increase by Rs 540. Similarly, a pensioner with a basic pension of Rs 9,000 could receive an additional Rs 270.
DA Hike: How is Dearness Allowance calculated?
DA is determined using a formula linked to the All-India Consumer Price Index for Industrial Workers (AICPI-IW). This index tracks the prices of common goods, helping to gauge the effect of inflation on working-class families. When the AICPI-IW increases, the DA also rises to compensate for the higher cost of living. Conversely, if the index declines, the DA would also decrease.
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The general formula for calculating DA for central government employees is:
DA% = (Average of AICPI-IW for the last 12 months-261.42)/261.42×100
This formula uses a base index of 261.42, which corresponds to the average AICPI-IW for the year 2001. A separate linking factor of 2.88 is used to convert the newer 2016-based index to the 2001 base for calculation purposes.