DA Calculation for PSU Employees – Q2 2026–27 (July 2026 to Sep 2026)

Dearness Allowance (DA) Calculation for PSU Employees – Q2 2026–27 (July 2026 to Sep 2026)

As we know, Dearness Allowance (DA) is paid as a fixed percentage of the basic salary. For instance, if an employee’s basic salary is ₹50,000 per month and the DA rate is 30%, then the DA payable will be ₹15,000 per month. This amount is paid in addition to the basic salary and other allowances such as House Rent Allowance (HRA).

The Ministry of Labour and Employment publishes the Consumer Price Index (CPI), which is used as the benchmark for determining the applicable Dearness Allowance (DA) rate. The Ministry has released the CPI-IW figures for September 2025, October 2025, and November 2025 (copy of the circular attached).

Based on the CPI-IW indices published by the Ministry of Labour and Employment, the Dearness Allowance (DA) for the 2^nd quarter of the financial year 2026-27 (i.e., July 2026 to Sep 2026) has been computed at 55.70%, as against 54.10% for the 1^st quarter of 2026-27, reflecting an increase of 1.60%.

DA (Dearness Allowance) for recent quarters:

The relevant CPI and DA% can be shown with the help of below diagram:

The methodology for calculation of DA for Q2 2026-27 is explained below:

For the purpose of Dearness Allowance (DA) computation, the adjusted CPI (i.e., Multiplied CPI) is taken as 2.88 times the published CPI. The average of the CPI for the last three months (immediately preceding the applicable quarter) is considered for the calculation.

Hence, the DA applicable for the 2^ND quarter of the financial year 2026-27 (i.e., July 2026 to Sep 2026) is computed as:

[(431.81-277.33)/277.33]*100 = 55.70139% ~ 55.70%

This DA of 55.70% is higher than the corresponding DA of 54.10% in the 1^st quarter of 2026–27, resulting in an increase of 1.60% in DA for Q2 2026–27.

GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU

Shram Bureau Bhawan, Block No. 2,
Institutional Area, Sector 38 (West),
Chandigarh – 160036
Dated: 30.06.2026

F.No. 5/1/2021-CPI

Press Release

Consumer Price Index for Industrial Workers (2016=100) – March, 2026

1. Labour Bureau, an attached office of the M/o Labour & Employment, has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. The index for the month of March, 2026 is being released in this press release.

2. The All-India CPI-IW for March, 2026 increased by 0.6 points and stood at 149.1 points (one hundred forty-nine point one).

3. Year-on-year inflation for the month of March, 2026 stood at 4.27% as compared to 2.95% in March, 2025.

Y-o-Y Inflation based on CPI-IW (General)

4. All-India Group-wise CPI-IW for February, 2026 and March, 2026:

CPI-IW: Groups Indices

GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU

Shram Bureau Bhawan, Block No. 2,
Institutional Area, Sector 38 (West),
Chandigarh – 160036
Dated: 30.06.2026

F.No. 5/1/2021-CPI 

Press Release

Consumer Price Index for Industrial Workers (2016=100) – May, 2026

1. Labour Bureau, an attached office of the M/o Labour & Employment, has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. The index for the month of May, 2026 is being released in this press release.

2. The All-India CPI-IW for May, 2026 increased by 0.9 points and stood at 150.8 points (one hundred fifty point eight).

3. Year-on-year inflation for the month of May, 2026 stood at 4.72% as compared to 2.93% in May, 2025.

Y-o-Y Inflation based on CPI-IW (General)

4. All-India Group-wise CPI-IW for April, 2026 and May, 2026:

CPI-IW: Groups Indices