Cabinet approves 3 pc hike in DA/DR for central govt employees, pensioners

NEW DELHI: Ahead of Diwali, the Union Cabinet on Wednesday approved a 3 per cent increase in Dearness Allowance (DA) and Dearness Relief (DR), benefiting over 1.17 crore central government employees and pensioners.

Announcing the Cabinet decision, Information and Broadcasting Minister Ashwini Vaishnaw described it as a "Diwali gift".

An additional instalment of DA to central government employees and DR to pensioners will be paid with effect from July 1, 2026.

The hike amounts to "an increase of 3 per cent over the existing rates of 60 per cent of the basic pay/pension, to compensate against price rise", an official release said.

The combined impact on the exchequer due to the increase in DA and DR would be Rs 10,016.10 crore per year.

The decision will benefit about 48.54 lakh central government employees and 68.71 lakh pensioners.

The increase is in accordance with the accepted formula, based on recommendations of the 7th Central Pay Commission, the release said.