Will govt announce DA hike for central govt employees before Diwali? All eyes glued to Cabinet decision

New Delhi: The central government employees were eagerly anticipating that the government might take a call on hiking the July 2026 DA hike before Dussehra. However, no such announcement was made. Speculations are rife that the government might make the announcement before Diwali.

Central government employees will increased DA hike in their salary along with six months of arrears from January 2026. Based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) for August 2026, the next DA or DR increase is expected to be 3-4 percent. This could take the current DA from 60 percent to 64 percent.

AICPI-IW August 2026

As per the Ministry of Labour and Employment's data, the All India Consumer Price Index for Industrial Workers (AICPI-IW) for August 2026 at 154.4, up 1.2 points from 153.2 in July.

Bonus worth Rs 2,010 crore for over 11.40 lakh railway employees

The Union Cabinet on October 14 approved a productivity-linked bonus (PLB) for 78 days, amounting to Rs 2,009.61 crore, to 11,40,770 railway employees. The maximum amount payable per eligible railway employee is Rs 17,951 for 78 days, in recognition of the excellent performance by the Railway staff.

The amount will be paid to various staff categories, like track maintainers, loco pilots, train managers (guards), station masters, supervisors, technicians, technician helpers, points men, ministerial staff, and other Group 'C staff.

According to the Cabinet, the PLB payment to eligible railway employees is made each year before the Durga Puja/Dusshera holidays.

When will DA rise?

While the Cabinet had made announcement regarding railway bonus, and also announced non-performance-linked bonus for central government employees, there still hasn't been any decision on DA hike.

Govt unions press demands for DA hike

The Confederation of Central Government Employees and Workers had previously requested the Department of Expenditure under the Ministry of Finance to speed up the process and announce the next installment of DA and DR, due with effect from July 1, 2026. The organisation has also said that once the relevant Consumer Price Index (CPI) data is available and new rate is calculated, the proposal should be placed before the competent authority for approval.

The Confederation has requested the government to speed up the process for the DA installment due from July 1, 2026, citing rising household expenses and other financial needs. The organisation said that the pending process should be completed soon so that the arrears and revised salary payments can be settled through the normal process.

How much DA can rise?

The AICPI-IW index is used to calculate DA calculations. Based on the latest data, DA for employees and pensioners is expected to increase by 3-4 percentage points to 63 or 64 percent for the July cycle.

The 12 months of AICPI-IW figures needed to calculate the July 2026 DA revision are now complete. Based on the index, the DA or DR is expected to be 3-4 percent which would raise the current DA from 60 percent to 64 percent.

The final DA rate will depend on the government’s calculation and rounding. However, central government employees expect it to be around 63–64 percent.