So, what happens is that suppose you are going to buy something. After all, you paid 500 rupees. Suppose you bought rice, milk, and peanut butter. This is in the month of January 2025. But after the next month, you buy the same things—rice, milk, and peanut butter—but this time you have to pay 550 rupees. It’s the same items, but the prices increased. So, 50 rupees have increased, and now even government employees have to pay this extra 50 rupees.
This is where Dearness Allowance (DA) comes into play.
Now, the question is: how does the government calculate how much percentage DA should be increased in seventh Pay Commission? What data does the government use to increase DA, and what role does the CPI index play in calculating DA? All these are the questions.
Table of Contents
7th Pay DA Calculator From January 2026
How to Calculate DA in the 7th Pay Commission using the Consumer Price Index?
Before calculating DA, first understand two things, and then you will know how DA is calculated:
- Base Year (2001 Base)
- CPI (Consumer Price Index)
First, understand the base year—this refers to how much prices have increased since that year. The base year is 2001, which means we refer to the price levels from 2001 as the reference point.
The process starts by taking the CPI values for the last 12 months. These values are then added together and divided by 12 to get the average. This gives the average CPI for the last 12 months.
The second important concept is the CPI. The CPI tracks how much prices are increasing over time.
So, the first step is to calculate the average CPI for the last 12 months. Then, this value is converted to the 2001 base using the factor 2.88. Finally, the DA formula is applied.
Okay, let’s understand how DA is calculated ?
Latest AICPIN Table for September 2025 |
AICPIN means All India Consumer Price Index, that is released on the last working day of every month by the Labour Bureau, has been released and the latest data for September 2025 for AICPIN is in the following table.
All India CPI-IW General Index for the Last 12 Months (October 2024 to September 2025)
| Month | Year | All India CPI-IW |
|---|---|---|
| October | 2024 | 144.5 |
| November | 2024 | 144.5 |
| December | 2024 | 143.7 |
| January | 2025 | 143.2 |
| February | 2025 | 142.8 |
| March | 2025 | 143.0 |
| April | 2025 | 143.5 |
| May | 2025 | 144.0 |
| June | 2025 | 145.0 |
| July | 2025 | 146.5 |
| August | 2025 | 147.1 |
| September | 2025 | 147.3 |
All India CPI-IW General Index Last 12 Month’s Official Data by Labour bureau |
Expected DA for July 2025 |
Expected Dearness Allowance (DA) for July 2025 has been announced by the Government of India. Now, DA has increased from 55% to 58% of the basic pay of central government employees and pensioners, effective from 1 July 2025
official order for the Dearness Allowance revision from July 2025
Expected DA for January 2026 |
Since the current DA rate from July 2025 is 58%, and based on the All‑India CPI‑IW (Consumer Price Index for Industrial Workers), some expert suggestions indicate that the DA for January 2026 could be 60%