NEW DELHI — The Union Cabinet has approved a 3% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, raising the rates from 60% to 63% of basic pay and pension, respectively.
The increase will take effect retrospectively from July 1, 2026, according to an official government announcement. The decision is expected to benefit around 48.54 lakh central government employees and 68.71 lakh pensioners.
The additional financial burden on the government is estimated at ₹10,016.10 crore annually. The revision follows the accepted formula based on the recommendations of the Seventh Central Pay Commission and is intended to help employees and pensioners cope with rising prices.
Dearness Allowance is paid to serving employees, while Dearness Relief is provided to pensioners. The two are periodically revised to help offset the impact of inflation on household purchasing power.
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