Sharing jubilant news ahead of Diwali, the government approved the decision to bring a 3 per cent hike in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners.
Announcing the decision, Information and Broadcasting Minister Ashwini Vaishnaw said the Union Cabinet headed by Prime Minister Narendra Modi has taken the decision to increase the DA and DR ahead of Diwali. The increase will be effective from July 1, 2026. The decision will benefit 48.54 lakh employees and 68.71 lakh pensioners.
"Union Cabinet, chaired by Hon’ble Prime Minister Shri Narendra Modi Ji, approves a 3% hike in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, from 60% to 63% of basic pay/pension, effective 1 July 2026. The decision will benefit around 48 lakh Central Government employees and 68 lakh pensioners, with an estimated annual exchequer impact of ₹10,016 crore," mentioned an official post on X (formerly Twitter).
What is DA and DR?
Dearness Allowance (DA) is paid to serving government employees, calculated as a percentage of their basic salary, used as cost of living adjustments to combat inflation. Similarly, Dearness Relief (DR) is paid to retired government employees for a similar purpose.
Breaking down the changes, central government employees and pensioners can expect the DA/DR hike due from July 1, 2026. The main hike is a 3 per cent hike in DA/DR, from 60 per cent to 63 per cent of basic pay/pension. The increase is being followed as per the accepted formula based on the 7th Central Pay Commission's (CPC) recommendations.
The previous hike, as per the 6th CPC, was effective from July 1, 2026, when DA/DR rose from 262 to 269 per cent of basic pay (+7 per cent).
The current DA/DR hike will cost the exchequer ₹10,016 crore per year, that is likely to benefit about 48 lakh central government employees and 68 lakh pensioners.
