Central government employees, pensioners to get 3% DA and DR hike
The Union Cabinet has approved a 3-percentage-point increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, offering additional financial support amid rising living costs.
Under the decision, the rates will increase from 60% to 63% of basic salary for serving employees and basic pension for retirees. The revised rates will take effect retrospectively from July 1, 2026.
The increase is expected to benefit around 48.54 lakh Central Government employees and 68.71 lakh pensioners nationwide.
According to the government, the combined annual financial impact of the revision is estimated at Rs. 10,016.10 crore. The additional expenditure reflects the cost of extending the revised benefits to eligible employees and pensioners.
The Cabinet approved the latest instalment in line with the established formula based on the recommendations of the Seventh Central Pay Commission.
Dearness Allowance is intended to help serving government employees cope with inflation and changes in the cost of living. Dearness Relief provides similar support to pensioners by adjusting their benefits to account for rising prices.
Since the revision is effective from July 1, eligible beneficiaries will receive the increased rates from that date, subject to the applicable payment arrangements. The retrospective implementation also means that any difference between the earlier and revised rates will need to be accounted for.
The latest revision forms part of the Centre’s periodic adjustments to inflation-linked benefits for its workforce and retired employees.