DA hike delay: Will central government raise dearness allowance in first week of April?

Central government employees and pensioners have been anticipating an increase in dearness allowance (DA) and dearness relief (DR) for January 2026, but the government hasn’t made any decisions yet. As March 2026 wraps up and April is just around the corner, will the government announce the DA in the next few days?

Long wait for DA announcement

Central government employees get the DA hike twice a year, in January and July.

The government, however, doesn’t announce the hike in the same month. Most of the times, it makes these announcements ahead of festivals. So, a lot of employees were expecting Centre to announce the DA hike ahead of Holi, which fell on March 4, 2026. But the government made no such announcement.

After that, expectations on DA hike announcement were high during the last Cabinet meeting of the month, on March 25. But employees were left disappointed this time too.

Also read: 8th Pay Commission new salary calculations: Will employee with Rs 47,600 basic pay get Rs 15 lakh arrear?

What can possibly be the reason for the delay?

Adhil Shetty, CEO, BankBazaar.com, told ET Wealth Online delay does not indicate any change in direction.

“What remains is largely procedural, including Cabinet approval and announcement timing. The transition to the 8th Pay Commission may be influencing the sequencing, but the current revision continues under the existing formula. Importantly, the hike will be implemented retrospectively from January, with arrears paid once notified."

Suchita Dutta, executive director, Indian Staffing Federation, says the deferment of DA announcement for January 2026 is primarily attributed to the administrative complexities involving the transition toward the 8th Pay Commission framework. “Historically, such updates are finalized by March; however, the government currently appears to be calibrating the payout against the latest Consumer Price Index for Industrial Workers (CPI-IW) data to ensure fiscal balance,” says Dutta.

Will government announce DA hike in the first week of April?

In 2025, the government announced the DA hike on March 28. With March almost over, there is a high likelihood of the government announcing the hike in the first week of April 2026.

What can the DA hike be - 2% or 3%?

Shetty says the inflation data that drives DA, based on the 12-month average of the CPI-IW, is already in place and points to a modest 2% increase, taking the rate to around 60%.

How is DA calculated?

DA is calculated based on the 12-month average AICPI-IW data. The Labour Bureau of the Finance Ministry releases this data every month.

Formula to calculate DA

DA% = [{12-month average of AICPI-IW (base year 2001)– 261.42}/261.42x100]

However, we will first have to link the 2016 base values to the 2001 base values by multiplying it by 2.88.

The factor of 2.88 is determined to equate the latest base year (2016) to 2001. Labour Bureau data shows that for August 2020, the value of CPI-IW under the old base (2001=100) was 33.8 and CPI-IW under the new base (2016=100) was 117.4. So, the factor is calculated as 338 ÷ 117.4= 2.88.

Average AICPI-IW reading of 12 months

The average of AICPI-IW reading for the 12 months (from January 2025-December 2025) is 145.54.

What can be the estimated DA rate for January 2026?

If we put the average inflation to the DA calculation formula

The DA percentage will be= (145.54X2.88)– 261.42}/261.42x100]

= 419.15-261.42/261.42X100

= 0.6033X100= 60.33%

Since the government takes round figures, a 60.33% DA means 60%.

However, these are estimates, the real rate will be know once the government announces the hike, which is eagerly awaited by a large number of employees.