The Central Government has approved a 3% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, bringing financial relief to millions of beneficiaries ahead of the festive season. With this decision, the DA rate will rise from 60% to 63% of basic pay, while pensioners will receive the revised Dearness Relief at 63% of their basic pension.
1.16 Crore Employees and Pensioners to Benefit
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the increase to help employees and pensioners cope with rising prices. The revised rates will be effective retrospectively from July 1, 2026.
According to the government, approximately 48.54 lakh central government employees and 68.71 lakh pensioners will benefit from the decision. The combined annual financial impact of the increase is estimated at ₹10,016.10 crore.
How Much More Will Employees Receive?
The additional amount employees receive will depend on their basic salary. Since DA is calculated as a percentage of basic pay, a three-percentage-point increase will raise the monthly allowance accordingly.
For example, an employee with a basic salary of ₹18,000 will receive an additional ₹540 per month. An employee drawing a basic salary of ₹30,000 will receive an additional ₹900 per month.
The revised rates will also make eligible employees and pensioners entitled to arrears for the period starting July 1, 2026, subject to the applicable payment schedule.
What Is Dearness Allowance?
Dearness Allowance is an inflation-linked component of salary paid to government employees to help offset the impact of rising living costs. Pensioners receive a corresponding benefit known as Dearness Relief.
The government generally revises DA and DR twice a year, with changes usually taking effect in January and July. The latest increase follows the established formula based on the recommendations of the Seventh Central Pay Commission.
The decision provides additional financial support to central government employees and pensioners, with the actual increase varying according to their basic pay or pension.