Central Government Approves 3% DA, DR Hike for Employees and Pensioners

The Union Cabinet has approved a 3 percentage point increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners. The revised rate will be 63% of basic pay and pension, up from 60%, effective July 1, 2026. 

According to news reports, Information and Broadcasting Minister Ashwini Vaishnaw announced the decision on Wednesday after a Cabinet meeting.  

Over 1.17 Crore People to Benefit 

The revision will cover 48.54 lakh central government employees and 68.71 lakh pensioners. The annual cost to the government is estimated at ₹10,016 crore, according to figures shared by Vaishnaw. 

As the increase takes effect from July 1, 2026, the revised rates will apply from that date. The announcement follows the government's twice-yearly review of DA and DR. 

Previous Increase in April 2026 

The Cabinet last approved a DA and DR increase in April 2026, raising the rates by 2 percentage points to 60% of basic pay and pension. The latest decision adds another 3 percentage points. 

The government generally revises DA and DR in January and July. DA is paid to serving employees, while DR is provided to pensioners. Both are calculated against basic pay or pension and are intended to help meet the rising cost of living. 

The latest revision follows the formula based on the 7th Central Pay Commission's recommendations. For employees and pensioners covered by the 6th Pay Commission scales, the rate will rise from 262% to 269%.  

Under the 5th Pay Commission scales, it will increase from 483% to 497%. 

Cabinet Approves Three Other Schemes 

The Cabinet also cleared three other schemes on Wednesday. The Container Manufacturing Promotion Scheme has been allocated ₹10,000 crore, while the Khelo India Sports Goods Manufacturing Scheme has an outlay of ₹1,856 crore.  

The Pradhan Mantri Viksit Gram Swaraj Yojana has been allocated ₹7,395 crore. The DA and DR increase will apply from July 2026, with the government facing an additional annual expenditure of ₹10,016 crore. 

Read More: PFRDA Defers Revised Charge Structure for PoPs Under NPS & NPS Lite to December 1, 2026! 

Conclusion  

With the latest revision, DA and DR will rise to 63% of basic pay and pension, respectively. The increase will cover 48.54 lakh employees and 68.71 lakh pensioners. 

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