New Delhi, Apr 18: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved an additional instalment of Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, effective January 1, 2026.
The hike of 2 percentage points raises DA and DR from the existing 58% to 60% of basic pay and pension, aimed at offsetting the impact of inflation. According to an official statement, the decision will have an annual financial implication of approximately ₹6,791.24 crore on the exchequer. The increase is expected to benefit around 50.46 lakh central government employees and 68.27 lakh pensioners.
The revision follows the standard formula linked to price rise, based on the recommendations of the 7th Central Pay Commission, which guides periodic adjustments in DA and DR. Dearness Allowance and Dearness Relief are revised periodically to help employees and pensioners cope with rising living costs, with changes typically aligned to movements in inflation indices.
