DA Hike in January 2026: Central Government Employees May Face Disappointment as DA Likely to Rise Only 2%

Central government employees and pensioners may receive discouraging news next month. According to a Financial Express report, the Dearness Allowance (DA) and Dearness Relief (DR) scheduled to take effect from 1 January 2026 are expected to increase by only 2%—one of the lowest hikes in the past seven years.

Since January 2019, DA increments have generally ranged between 3% and 4%, with only one exception: a 2% increase in January 2025. If the projected figure holds true, employees will see a second consecutive minimal hike.

First DA Revision Outside the 7th Pay Commission Cycle

This upcoming DA adjustment carries added significance. For the first time, the hike will occur after the expiry of the 7th Pay Commission’s 10-year tenure, which ends on 31 December 2025.
Although the 8th Pay Commission has been constituted, its implementation date has not yet been announced. Estimates suggest that pay revisions under the new commission may not be introduced until late 2027 or early 2028.

How January 2026 DA Will Affect Future Salaries

The DA effective from January 2026 will play a critical role in shaping employees’ future basic pay. When the 8th Pay Commission eventually comes into force, the prevailing DA at that time will be merged into the basic salary, resetting DA to zero—a pattern followed at the introduction of every pay commission.

Therefore, the DA increases scheduled for January 2026, July 2026, January 2027, and July 2027 will collectively determine employees’ revised basic pay in the next pay matrix.

Higher DA Now Means Higher Basic Pay Later

The projected 2% hike will serve as the starting benchmark for DA accumulation under the upcoming commission. A higher DA percentage at the time of the 8th Pay Commission’s rollout will translate directly into a higher new basic salary.

How Much Will Employees Receive?

For example, if a central government employee earns a basic salary of ₹50,000, and the current DA rate is 58%, the DA amount stands at ₹29,000.
If the DA rises to 60%, the employee will receive ₹30,000—a monthly increase of ₹1,000.

While any increase brings some relief, the modest 2% projection for January 2026 is likely to disappoint millions of employees and pensioners awaiting a more substantial adjustment amid rising inflation.

✅ A shorter mobile-friendly version
✅ A boxed explainer on how DA is calculated
✅ A comparison chart of DA hikes from 2019 to 2025