Centre raises DA, DR to 60% as Cabinet clears fresh relief for employees and pensioners

The Union Cabinet on Saturday approved an additional instalment of Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for pensioners, increasing both by 2 percentage points with effect from January 1, 2026, in a move aimed at easing the impact of inflation.

‎Announcing the decision after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the hike raises DA and DR from 58% to 60% of basic pay and pension. “The additional instalment is intended to compensate employees and pensioners against price rise,” he said, noting that the revision adheres to the government’s established formula.

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‎The financial implications of the increase are substantial, with the annual burden on the exchequer estimated at Rs 6,791.24 crore. The decision is set to benefit approximately 50.46 lakh Central government employees and 68.27 lakh pensioners, impacting over 1.18 crore individuals nationwide.

‎Dearness Allowance and Dearness Relief are revised periodically to offset inflation and safeguard real incomes. Officials pointed out that the latest revision follows the formula recommended by the 7th Central Pay Commission, which ties adjustments to movements in the Consumer Price Index.

‎The hike comes at a time of continued pressure on household budgets due to rising prices and is expected to provide some financial relief to millions of families dependent on government salaries and pensions. It also underscores the Centre’s adherence to a structured mechanism for wage revisions, even as discussions on future pay commission frameworks continue in policy circles.