DA hike: Inflation-linked wage, DA merger, new formula—here are Dearness Allowance-related demands of employee groups
Here's what's trending across India right now:
More than one crore rupees beneficiaries — about 50 lakh central government employees and nearly 65 lakh retired central government pensioners — benefit from the Centre's DA hike announcements. ( Bloomberg / Representative Image ) AI Quick Read A significant number of India's public service employees are set to benefit from their various state governments' announcements on Dearness Allowance (DA) hikes. The Centre hiked DA by 2% in April, from 58% of basic pay to 60%, effective from 1 January this year.
Adding to this, The Centre usually updates DA biannually using data from the All-India Consumer Price Index ( AICPI ), new announcements are made in March and October, with rollouts in January and July. The move is aimed at countering the increasing cost of living expenses for employees and pensioners amid rising inflation.
Meanwhile, More than one crore rupees beneficiaries — about 50 lakh central government employees and nearly 65 lakh central government pensioners , including defence personnel and retirees, will benefit from the Centre's DA hike announcements across 18 employee levels.
Notably, Today, we take a look at some of the DA demands made by representative groups, unions and stakeholders who collectively represent a large number of employees and pensioners, including defence and railway staff.
As per the latest buzz, Submissions made by these groups are expected to play an important role in shaping the 8th pay commission's final recommendations. Notably, the 8th CPC closed the memorandum submission window last month on 15 June, while submissions for data will close on 31 July. It has, in the meantime, scheduled meetings in Delhi, Chennai and Puducherry to facilitate stakeholder discussions.
In further updates, Notably, the government has not officially revealed a DA merger as of July 2026, but the issue has gained traction because basic salary determines other components of compensation i.e. provident fund contribution, pension, allowances, gratuity, and more. Thus, higher DA and, by association, basic pay mean an increase in overall salary and linked allowances.
On top of that, The federation has suggested that the DA calculation formula must reflect relatively higher inflation on personal items and has called for a complete overhaul of the index, replacing it with an employee-specific cost-of-living index.
Notably, after the Centre's announcement came increases by the Indian Banks' Association ( IBA ) — which hiked basic salaries between ₹ 48,000 and ₹ 1,17,000 and DA from ₹ 435 to ₹ 1,050 for workmen and officer employees across levels for May, June and July 2026; and the Indian Railways — which hiked DA by 2%.
Source: mint