New Delhi | October 2026
Employees of Central Public Sector Enterprises (CPSEs) on the 2017 pay scales are awaiting the next revision of Industrial Dearness Allowance (IDA) for the October–December 2026 quarter. While the Department of Public Enterprises (DPE) has not yet issued the Office Memorandum notifying the new rate, the latest Consumer Price Index for Industrial Workers (CPI-IW) data indicates that the IDA could work out to approximately 59.06% under the applicable formula.
Until the new DPE order is issued, the 55.7% IDA rate notified for July–September 2026 remains the applicable rate.
Formula Points to 59.06%
The calculation of IDA for the October 2026 quarter is based on the CPI-IW figures for June, July and August 2026.
The relevant index numbers are:
| Month | CPI-IW |
|---|---|
| June 2026 | 151.9 |
| July 2026 | 153.2 |
| August 2026 | 154.4 |
| Three-month average | 153.17 |
Using the applicable DPE formula, the average CPI-IW of 153.17 produces an indicative IDA rate of approximately 59.06%.
This would represent an increase of 3.36 percentage points over the currently applicable 55.7% rate. However, employees should note that 59.06% is a calculation based on published CPI-IW data and should not be treated as the final notified rate until DPE issues its official order.
What Could the Increase Mean for Employees?
The potential increase becomes significant when applied to basic pay.
For example, an employee with a basic pay of ₹50,000 per month currently receives IDA of:
55.7% of ₹50,000 = ₹27,850
At an indicative rate of 59.06%, the IDA would be:
59.06% of ₹50,000 = ₹29,530
This represents an indicative increase of approximately ₹1,680 per month, before considering the impact on other salary-linked components.
Similarly, on a basic pay of ₹1,00,000, IDA would increase from ₹55,700 at 55.7% to approximately ₹59,060 at 59.06%, representing a difference of about ₹3,360 per month.
The actual benefit, however, will depend on the employee’s applicable pay scale, basic pay and other salary provisions.
August CPI-IW Provides the Final Input
The Labour Bureau’s August 2026 CPI-IW release provided the third and final monthly index required for calculating the October–December IDA.
The August 2026 CPI-IW stood at 154.4, increasing by 1.2 points from July’s 153.2. Year-on-year CPI-IW inflation was reported at 4.96% in August 2026, compared with 3.16% in August 2025.
Food and beverages were among the key contributors to the monthly movement, with the relevant index increasing from 158.9 in July to 161.3 in August.
These CPI-IW movements directly influence the quarterly IDA calculation for employees covered by the applicable CPSE pay structure.
Why the DPE Order Matters
The Department of Public Enterprises plays a central role in notifying IDA rates applicable to CPSE employees covered under the relevant pay-revision framework.
Therefore, publication of CPI-IW data alone does not automatically change the salary rate. The official DPE Office Memorandum is required before the new IDA rate becomes formally notified.
The DPE’s official website currently lists IDA revision orders among its CPSE-related office orders, including the revision effective from 1 April 2026.
Consequently, employees should distinguish between the calculated rate and the notified rate.
Who Is Covered?
The quarterly IDA calculation discussed here applies primarily to executives and non-unionised supervisors of CPSEs covered by the 2017 pay scales introduced following the Third Pay Revision Committee.
It should not be confused with the Dearness Allowance applicable to Central Government employees. Central Government DA follows a separate mechanism and is revised on a different cycle.
Similarly, employees covered by older CPSE pay scales, state government employees and bank employees may be governed by different provisions and should not automatically apply the 59.06% figure to their salary.
Waiting for the Official Notification
The October–December 2026 quarter began on 1 October 2026, but the DPE notification determining the new IDA rate has not yet been issued. As a result, the 55.7% rate remains applicable until the new order is formally notified.
Once DPE issues the Office Memorandum, CPSEs will be able to implement the revised rate in accordance with the terms of the notification. Depending on the notification’s effective date and implementation provisions, employees may also receive adjustment or arrears for the applicable period.
Impact on PSU Employees
The potential movement from 55.7% to around 59.06% is being closely watched by thousands of CPSE employees because IDA constitutes a significant component of their salary.
A higher IDA rate can provide partial compensation against increases in the cost of living and inflation. For employees with higher basic pay, even a few percentage points of additional IDA can translate into a meaningful increase in monthly salary.
For CPSEs, however, an increase in IDA also has implications for employee costs and overall operating expenses. The financial impact will vary across enterprises depending on their employee strength, pay structure and compensation policies.
The Worldonomics Times Perspective
The expected October 2026 IDA revision highlights the importance of the CPI-IW index in determining compensation for employees in India’s public-sector enterprises.
At present, 55.7% remains the officially applicable rate, while 59.06% represents the rate indicated by the available CPI-IW data and the applicable calculation formula.
The next important development will therefore be the DPE’s official Office Memorandum. Until that notification is issued, employees should treat 59.06% as an indicative calculation rather than a confirmed entitlement.
For India’s CPSE workforce, the upcoming notification will be closely watched as it will determine the applicable Industrial Dearness Allowance for the October–December 2026 quarter.
Key Takeaway:
Current notified IDA: 55.7% | Formula-based indication: 59.06% | Difference: 3.36 percentage points | Final rate: Awaiting DPE notification.
