The Union Cabinet has approved a 3 percentage point hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, taking the rate from 60% to 63% of basic pay and pension, respectively, with effect from July 1, 2026.
The decision will benefit around 1.16 crore people, including 48 lakh central government employees and 68 lakh pensioners. The increase is estimated to have an annual impact of ₹10,016 crore on the government exchequer.
What is Dearness Allowance (DA)?
Dearness Allowance is an amount paid by the government to its employees to help offset the impact of inflation on their purchasing power. It is calculated as a percentage of basic salary and revised periodically.
What is Dearness Relief (DR)?
Dearness Relief is the corresponding benefit paid to central government pensioners to help them cope with inflation. It is calculated as a percentage of basic pension.
How much will employees and pensioners get?
With the latest revision, DA and DR will rise from 60% to 63% of basic pay and basic pension, respectively. The actual increase will depend on an individual’s basic pay or pension. Since the revision is effective from July 1, 2026, eligible employees and pensioners will also be entitled to the applicable arrears for the period from that date, subject to the government’s implementation instructions.
The hike comes ahead of Diwali.