8th Pay Commission: The latest inflation data released by the Ministry of Labour and Employment has put central government employees and pensioners on alert,
as it brings the next dearness allowance (DA) revision firmly into focus. The All India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025 has been pegged at 148.2, a crucial input used to calculate DA for serving employees and dearness relief (DR) for pensioners. This index plays a vital role in ensuring that salaries and pensions keep pace with rising prices. It directly influences the twice-a-year DA revision, with the next hike scheduled to take effect from January 1, 2026, under the framework of the 8th Pay Commission. Why November’s Inflation Reading Is Critical The November AICPI-IW print has pushed the rolling 12-month average close to the next important milestone for DA calculation. Based on the established formula under the 7th Central Pay Commission, DA had already reached 59.93 per cent by November 2025, just a fraction below the 60 per cent threshold. With only the December 2025 data left to be released, most projections indicate that the outcome is nearly locked in. Even if inflation fluctuates modestly in December, the computed DA is expected to cross the 60 per cent mark. Since DA hikes are announced in whole numbers, this points to a likely 2 percentage point increase, raising DA from the current 58 per cent to 60 per cent starting January 2026. Could The DA Increase Be Bigger? Employee bodies believe there is room for a steeper hike if inflation remains firm. According to Manjeet Singh Patel, president of the All India NPS Employees Federation, if December’s AICPI-IW stays close to November levels, the DA hike could fall in the range of 3 per cent to 5 per cent, states a CNBC report. Scenario-based calculations suggest that if the December index prints around 146–147, DA could move up to 61 per cent. A reading closer to 148 could even push DA to 63 per cent. However, these estimates remain indicative until the Labour Ministry releases the final December data. Current DA Status And What Comes Next The last DA revision took place in July 2025, when the government raised it by 4 percentage points from 54 per cent to 58 per cent. Although the next hike will take effect from January 1, 2026, the official announcement is expected in March or April 2026, following the publication of the December AICPI-IW figures. Any increase will be paid retrospectively as arrears. Where The Pay Commission Fits In While the 7th Central Pay Commission concluded on December 31, 2025, there has been no revision in basic pay from January 2026. The 8th Pay Commission, notified in November 2025, is expected to submit its recommendations within about 18 months. Its report will determine the new fitment factor, which will ultimately lead to a structural adjustment of salaries and pensions. Until then, DA continues as a separate component and is merged into basic pay only when the new fitment factor is implemented.
