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New Delhi: Amid growing enthusiasm among central government employees over the official notification of the Terms of Reference for the 8th Central Pay Commission (CPC), the Labour Bureau has reported another hike in the All India Consumer Price Index (AICPI-IW) for industrial workers. In September 2025, AICPI-IW increased by 0.2 points to 147.3. This is after rising 0.6 points to 147.1 in August 2025 from 146.5 in July 2025. AICPI-IW rose 1.5 points to 146.5 in July. Thus, the figures of AICPI-IW have been increasing steadily for the last three months.
All India CPI-IW increased by 0.2 points to 147.3 for September 2025. Year-on-year inflation for the month of September 2025 was 2.79 percent compared to 4.22 percent in September 2024, the press mentioned.
As per the recommendations of the Seventh Pay Commission, AICPI-IW data is currently used to determine the growth rate in DA and Dearness Relief (DR) for central government employees and pensioners. DR/DR helps employees and pensioners deal with the impact of inflation on their monthly wages.
The AICPI-IW data from July to December 2025 will be used by the government to determine the hike in Dearness Allowance effective from 1 January 2026. The AICPI-IW data has already increased in July, August and September. If it continues to increase for the next three months (October, November and December), central government employees and pensioners can expect better DA/DR hikes from January 2026. It is expected that the DA will rise to 60 percent in the new year.
Index for September 2025:147.3
Average index so far: 416.42
Role in 8th Pay Commission
The rate of DA/DR applicable in January 2026 for the benefit of employees and pensioners can also be used by the 8th Pay Commission to determine the limit for increment. High DA in January may lead to a further increase in salary.
However, the Finance Ministry has asked the 8th Pay Commission to review the existing allowances given to employees and pensioners. Therefore, it cannot be said with certainty how the rate of Dearness Allowance, which will be implemented in January 2026, will affect the salary hike under the 8th Pay Commission.
The 8th Pay Commission may take up to 18 months to review the existing salary structure and submit its recommendations.
