Cabinet Approves 2% Hike in DA and DR for Central Government Employees and Pensioners
The increase follows the established formula based on the recommendations of the 7th Central Pay Commission
n a significant relief aimed at offsetting rising inflation, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from January 1, 2026.
With this decision, DA and DR will increase by 2%, taking the total rate from 58% to 60% of Basic Pay and Pension, respectively. The revision is intended to compensate employees and pensioners for the impact of price rise.
The financial implication of the hike is estimated at ₹6,791.24 crore annually, placing a considerable but planned burden on the government exchequer. The move is expected to benefit approximately 50.46 lakh Central Government employees and 68.27 lakh pensioners across the country.
The increase follows the established formula based on the recommendations of the 7th Central Pay Commission, which links DA revisions to changes in the Consumer Price Index (CPI).
This latest revision continues the government’s periodic adjustments to ensure that salaries and pensions remain aligned with inflation trends, thereby safeguarding the purchasing power of beneficiaries.
