New Delhi, Oct 28: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 3% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, providing additional financial support to millions of beneficiaries amid rising living costs.
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The revised rates will take effect from July 1, 2026, raising DA and DR from the existing 60% to 63% of basic pay and pension, respectively.
According to the Cabinet announcement, the additional instalment is intended to compensate employees and pensioners for the impact of rising prices. The increase follows the established formula based on the recommendations of the 7th Central Pay Commission.
Over 1.17 Crore Beneficiaries to Benefit
The decision is expected to benefit approximately 48.54 lakh Central Government employees and 68.71 lakh pensioners, taking the total number of beneficiaries to around 1.17 crore.
The combined annual financial impact of the DA and DR revision on the government exchequer is estimated at ₹10,016.10 crore.
What the DA Hike Means
Dearness Allowance is provided to serving government employees to help offset the impact of inflation, while Dearness Relief serves a similar purpose for pensioners.
With the latest revision, eligible employees and pensioners will receive benefits at the enhanced rate of 63%, effective retrospectively from July 1, 2026. Eligible beneficiaries may also receive arrears for the period between the effective date and the implementation of the revised rates, subject to the applicable government orders.
The decision marks a significant financial measure for Central Government employees and pensioners, helping them manage household expenses amid changing economic conditions.
