8th Pay Commission Update: The All India Consumer Price Index for Industrial Workers, known as AICPI-IW, showed a small jump in August 2025. The number went up by 0.6 point and reached 147.1. In July 2025, the index stood at 146.5. The Labour Bureau, which works under the Ministry of Labour and Employment, shared this information. In its press release, it said, “The All-India CPI-IW for August, 2025 increased by 0.6 point and stood at 147.1 (one hundred forty-Seven point One).”
This rise comes after a bigger increase in July 2025, when the index grew by 1.5 points or about 1.03%. The data is watched closely because it is used to calculate dearness allowance, or DA, for central government workers. The formula to decide DA comes from the 7th Pay Commission.
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All-India Group-wise CPI-IW for July, 2025 and August, 2025:
| Groups | July 2025 | August 2025 |
|---|---|---|
| Food & Beverages | 150.7 | 151.8 |
| Pan, Supari, Tobacco & Intoxicants | 167.9 | 168.2 |
| Clothing & Footwear | 152.4 | 152.7 |
| Housing | 137.7 | 137.7 |
| Fuel & Light | 153.5 | 152.9 |
| Miscellaneous | 142.6 | 143.2 |
| General Index | 146.5 | 147.1 |
How are DA and 8th Pay Commission connected?
Dearness Allowance or DA is given to workers so their salary doesn’t lose value when things get more expensive. The government recently said it will give 3% more DA to employees, starting from July 1, 2025.
The next increase will come on January 1, 2026. That hike will depend on the AICPI numbers from July to December 2025. In July, the index went up 1.5 points and in August it went up another 0.6 points, reported Upstox. if it keeps going up like this the employees are hoping the DA increase in January 2026 will be bigger.
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This upcoming DA hike has another layer of importance. Experts believe that the rate of DA that becomes active in January 2026 may also guide the 8th Central Pay Commission when it decides the new minimum salary hike factor, also called the fitment factor. If DA is higher, the fitment factor may also be a little higher, which can benefit employees once the new pay commission starts.
The 8th Pay Commission has not been yet formally set up, and its terms of reference are still awaited. One more point to remember is that whenever a new pay commission comes into effect DA is usually reset to zero.
