The All India Consumer Price Index for Industrial Workers (AICPI-IW) has risen for the 5th consecutive month, signalling sustained inflationary pressure. This index is closely tracked because it directly affects dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, which in turn impacts monthly take-home pay.
In November 2025, the AICPI-IW increased by 0.5 point to 148.2, following steady rises in previous months. The index had already climbed by 0.4 point in October, 0.2 in September, 0.6 in August, and a sharp 1.5 points in July 2025. This consistent upward movement highlights rising costs across essential consumption categories.
A closer look at group-wise data shows mixed trends. Food and beverages saw a notable increase, moving from 151.8 in October to 152.8 in November. Fuel and light also edged up marginally. Clothing, footwear, and housing remained unchanged, while pan, tobacco, and intoxicants recorded a slight decline. Overall, the general index moved from 147.7 to 148.2 during the month.
Under the 7th Pay Commission formula, DA and DR are calculated using the average AICPI-IW data of the previous six months. The government revises DA twice a year, in January and July.
For the upcoming DA revision effective 1 January 2026, AICPI-IW data from July to December 2025 will be considered. Since the index has risen steadily from July to November, a continuation of this trend in December could lead to a reasonable DA hike. However, the final decision rests entirely with the government, making it difficult to predict the exact percentage increase.
The 8th Central Pay Commission has recently begun its work. Historically, pay commissions have factored in the prevailing DA rate while calculating salary revisions. If a similar approach is adopted, the DA rate effective from January 2026 could influence future pay structures. That said, it is still too early to draw conclusions, as the commission may choose a different methodology altogether.
The steady rise in AICPI-IW strengthens expectations of a DA hike in January 2026, offering some relief to employees and pensioners amid rising prices. While the data trend is encouraging, both the DA increase and any impact on the 8th Pay Commission will depend on government decisions. For now, AICPI-IW remains a key indicator to watch in the coming months.
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Published on: Jan 2, 2026, 11:07 AM IST
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