There is a possibility of another increase in the Consumer Price Index (DA) for civil servants in the new year. Estimates suggest that starting from January 2027, the DA could rise from the current 63% to 67%. This implies a potential increase in the consumer price index by 4 percentage points relative to the base salary. This forecast is based on the formula of the seventh salary committee and available inflation data. However, for this forecast to be confirmed, inflation indicators must remain at the August level until December 2026.
The central administration government increased the consumer price index to 63% of the base salary as of July 1, 2026. The decision on the next tranche, which will take effect in January 2027, will be made based on inflation data for the period from January to December 2026. The calculation of DA uses the Industrial Workers' Consumer Price Index (AICPI-IW) for industrial workers. The DA calculation formula has not changed since 2016. Data for the period from January to August 2026 is already available, while September data has not yet been published. Therefore, the DA forecast for January 2027 was made assuming that the August level would be maintained until December.
The DA calculation is based on the average AICPI-IW over the previous 12 months. Available and projected data for January-December 2026 show an average AICPI-IW of 152. Applying this average value to the DA formula allows for the determination of the potential rate.
The DA calculation formula is as follows: DA = [{(Average AICPI-IW over the last 12 months × 2.88) - 261.41} ÷ 261.41] × 100. According to this calculation, the steps are performed as follows: first step: 152 × 2.88 = 437.76; second step: 437.76 - 261.41 = 176.35; third step: 176.35 ÷ 261.41 = 0.674607; fourth step: 0.674607 × 100 = 67.46%. Thus, according to the formula, the DA rate is about 67.46%. Since the current DA is 63%, the potential increase will be 4.46 percentage points.
Although the calculations show a figure of 67.46%, the government usually rounds the DA rate down instead of increasing it to the next whole number. In this case, with an increase of 4 percent, the DA could rise from 63% to 67%. It is important to note that the 67% forecast is not final. It depends on the condition that the AICPI-IW indicator remains at the level of 154.4 from September to December. If the index rises in subsequent months, the DA rate may be higher. Conversely, a decrease in the index could lead to a lower projected increase.
Trade unions are also making demands to the recommendations of the eighth salary committee regarding changes to the DA calculation methodology. They insist that the increase should be based on actual indicators, not rounding, which they call 'point-by-point' DA. The Federation of National Postal Organizations (FNPO) demanded that DA be paid 'point-by-point' without rounding. Furthermore, the organization proposed introducing a mechanism where, if DA/DR (Consumer Price Index and Inflation Allowance) exceeds 25%, it would be included in the base salary. In turn, the Indian Pensioners Society requested a change in DA and DR every three months. For this, it was proposed to use the average inflation index for three months and provide compensation 'point-by-point'. All these demands may be considered during the work of the eighth salary committee.
The eighth salary committee was formed in November 2025 and has been given 18 months to prepare its report. According to this schedule, the committee may submit its recommendations to the central administration government by May 2027. The report is expected to appear around May-June 2027. If the DA rises to 67% from January 2027, this could be the last DA adjustment under the seventh salary committee before the implementation of the new salary structure of the eighth committee. When implementing the new salary structure, the current DA may be integrated into the new base salary, and the DA calculation may start from scratch. This does not mean that employees will lose the benefit of the current 67% DA, but rather that it will likely be included in the new base salary. Nevertheless, the exact method of including DA in the new salary structure and the date of its introduction will only be determined after the final approval and official decrees of the central administration government. At present, the 67% DA should be considered only as a preliminary estimate for January 2027.
