Cabinet approves 3% DA hike for central government employees and pensioners

The Union Cabinet has approved a 3 per cent increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, raising the existing rate from 60 per cent to 63 per cent of basic pay and pension.

The decision, announced ahead of the Diwali festival, will take effect retrospectively from July 1, 2026. The move reflects the central government's sustained commitment to public welfare and safeguarding the purchasing power of public sector personnel against inflation.

Announcing the decision after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw stated that the revision will benefit 48.54 lakh central government employees and 68.71 lakh pensioners, bringing the total number of beneficiaries to over 1.17 crore.

Impact on monthly earnings

The revision directly raises the take-home monthly pay and pension structure across government service grades. Because DA is calculated strictly on basic salary rather than total pay, the net monetary benefit varies depending on an employee's pay scale.

Pensioners will receive a corresponding increase calculated on their eligible basic pension amount. Since the adjustment is effective from July 1, eligible employees and retirees will also receive arrears for the preceding months along with their updated payouts.

Fiscal commitment and regular revisions

Minister Vaishnaw stated that the total financial implication of the decision stands at approximately ₹10,016 crore annually. The substantial budgetary outlay demonstrates the government's capability to deliver structured financial relief to its workforce while maintaining overall economic stability.

The central government routinely revises DA and DR twice a year, with instalments falling due on January 1 and July 1. This latest announcement follows a 2 per cent increase approved in April 2026, which had brought the rate to 60 per cent effective from January 1, 2026.