Expected DA/DR from January 2026:The Labour Bureau under the Ministry of Labour & Employment has issued the All-India Consumer Price Index for Industrial Workers (CPI-IW) for August 2025, showing a rise of 0.6 points, reaching 147.1 (One hundred forty-seven point one).
This steady upward movement has advanced the calculation for the next instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from January 2026, into its second stage.
The final DA/DR rate will depend on the CPI-IW averages for the remaining four months (September – December 2025). However, experts suggest that the DA rate is expected to touch 61 % – 62 % under the 7th CPC scale by January 2026 if the current inflation trend continues.
DA/DR from January 2026 & Fitment Factor in 8th CPC: Key Facts
| Parameter | Details |
| CPI-IW (Base 2016 = 100) | 147.1 in August 2025 |
| Change over July 2025 | + 0.6 points |
| DA/DR as of July 2025 | 58 % (approved by Cabinet) |
| Increase effective 01.07.2025 | + 3 % over previous rate |
| Likely DA from Jan 2026 | 61 – 62 % (expected) |
| Base year for DA calculation | 2016 = 100 (CPI-IW series) |
| Significance | Will impact fixation of minimum pay under 8th Central Pay Commission |
| Reset after 8th CPC | DA will reset to zero from January 2026 |
January 2026 DA/DR Table Expected
| Month (2025) | CPI-IW (2016=100) | 12-Month Average Index | 7th CPC DA% (est.) | Change (%) |
| January 2025 | 143.2 | 408.75 | 56.36 % | – 0.5 |
| February 2025 | 142.8 | 409.58 | 56.68 % | – 0.4 |
| March 2025 | 143.0 | 410.58 | 57.06 % | + 0.2 |
| April 2025 | 143.5 | 411.58 | 57.44 % | + 0.5 |
| May 2025 | 144.0 | 412.58 | 57.82 % | + 0.5 |
| June 2025 | 145.0 | 413.50 | 58.17 % | + 1.0 |
| July 2025 | 145.9 (est.) | – | 58 % (Official) | – |
| August 2025 | 147.1 (Actual) | – | ≈ 59 % (Expected) | + 0.6 |
Note: This table has been prepared using CPI-IW base 2016 = 100 as per the Labour Bureau; values rounded.
Relation between DA/DR and 8th CPC Fitment Factor
The January 2026 DA rate will play a crucial role in determining the fitment factor and minimum pay under the upcoming 8th Central Pay Commission (CPC).
When the new pay matrix is implemented, the DA is merged with basic pay, and the DA percentage resets to zero.
Hence, the DA figure as on January 2026 effectively indicates how much inflation has accumulated since the 7th CPC base year.
| Component | Expected Scenario (Jan 2026) |
| DA Rate before 8th CPC reset | Approx. 61 – 62 % |
| Proposed Fitment Factor (Tentative) | 2.80 – 3.00 times current Basic Pay |
| Expected Minimum Pay (after 8th CPC) | ₹ 23,000 – ₹ 25,000 (per month, tentative) |
| Implementation Date (Likely) | 01 Jan 2026 |
(Official figures will be finalised only after the 8th CPC report and Cabinet approval.)
DA Calculation Formula Based on 7th CPC
- DA % = ((Average CPI-IW for 12 months – 115.76) / 115.76) × 100
- Base year shifted to 2016 = 100 from 2001 = 100 w.e.f. September 2020.
- The index is published monthly by the Labour Bureau, Shimla.
- Average of the last 12 months’ CPI-IW is taken to determine the next DA revision (January & July each year).
Expected Timeline: DA, D,R and Fitment Factor in 2026
| Event | Timeline |
| CPI-IW for Aug 2025 | Released on 29 Aug 2025 |
| CPI-IW for Sep–Dec 2025 | To be released monthly till Jan 2026 |
| DA/DR Calculation Finalised | After release of Dec 2025 index (in Jan 2026) |
| Cabinet Approval for DA/DR Hike | Likely March 2026 |
| Arrears Payment | With April 2026 salary or pension bill |
Expert Advise
Economists and pay-commission analysts suggest that moderate inflation and the steady CPI-IW growth trend indicate a further 3–4 % DA rise from January 2026.
This would take the overall DA/DR to around 61 – 62 percent, before being merged under the 8th CPC pay structure.
In essence, the August 2025 CPI-IW data not only hints at the next DA revision but also sets the base benchmark for future salary and pension revisions in 2026.
FAQs on Expected DA/DR & 8th CPC Fitment Factor January 2026
As per the current CPI-IW trend, the DA for Central Government employees is likely to reach around 61% to 62% under the 7th CPC structure by 01.01.2026, before being merged under the 8th Pay Commission.
The All-India Consumer Price Index for Industrial Workers (CPI-IW) measures inflation. DA is directly linked to this index — as CPI-IW rises, DA increases proportionally to offset inflationary effects on employees and pensioners.
The final DA/DR rate will be calculated after the release of the December 2025 CPI-IW data (expected in January 2026) and is generally approved by the Cabinet around March 2026.
The DA rate of January 2026 will serve as a reference point for the 8th CPC fitment factor. When the new pay scales are implemented, this DA is merged with the basic pay, and the DA count resets to zero.
Analysts expect the fitment factor to be between 2.80 and 3.00, which could raise the minimum basic pay to around ₹23,000 – ₹25,000 per month, subject to final CPC recommendations and Cabinet approval.
Once the 8th CPC pay matrix is rolled out, DA will reset to 0% from January 2026 and will again start accumulating biannually (January and July) based on future CPI-IW figures.