The upcoming Dearness Allowance revision for January 2027 will rely on the 12-month average of the AICPI-IW index spanning January through December 2026. September 2026 figures climbed to 155.4, pushing the running calculation to 65.81%, which effectively rounds down to 65% because decimals are excluded. If the index climbs sequentially to 159.1 by year-end, the allowance will hit 68%, whereas stagnant or dropping prices will result in 67%. The ultimate decision on implementing this allowance adjustment rests with the Finance Ministry.
Key points
January 2027 allowance revisions will be established by the full twelve-month average of…: January 2027 allowance revisions will be established by the full twelve-month average of consumer price index data from 2026.
Should inflation numbers remain flat at 155.4 or decline toward mid-year levels, the resu…: Should inflation numbers remain flat at 155.4 or decline toward mid-year levels, the resulting rate will settle at 67%.
The Finance Ministry holds the ultimate authority to confirm and execute the final Dearne…: The Finance Ministry holds the ultimate authority to confirm and execute the final Dearness Allowance increase.
Sources checked by our analysis pipeline: 1
The Labour Bureau has released retail inflation figures for September 2026. Retail inflation, which is tracked by the All India Consumer Price Index – Industrial Workers (AICPI-IW), hit 155.4 in September, a full 1 point higher than the August figure of 154.5.
Following the September retail inflation update, the running DA has reached 65%. However, the next announcement for a DA increase (for January 2027) will depend on the average inflation from January to December 2026.
Going by the latest inflation trend, could the DA in January hit 67% or more? Check the estimates to find out!
Also Read: 8th Pay Commission pension calculator: How Rs 25,000 to Rs 75,000 basic pensions can change at 2.0, 2.25 and 2.57 fitment factors
But first, understand how the running DA rate climbed to 65% following the September inflation data.
65% DA calculation after September retail inflation data
When we calculate DA, we consider the retail inflation over the past 12 months. The Labour Bureau releases the inflation data for the previous month at the end of the following month. For example, the…
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