Cabinet clears 2% DA/DR hike for central government employees, pensioners

New Delhi: The Union Cabinet on Saturday approved an increase in Dearness Allowance (DA) and Dearness Relief (DR) by 2 per cent, benefiting about 50.46 lakh central government employees and 68.27 lakh pensioners.

The combined impact on the exchequer on account of an increase in both Dearness Allowance and Dearness Relief would be Rs 6,791.24 crore per annum, said Information and Broadcasting Minister Ashwini Vaishnaw while briefing about decisions taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.

The approval to release an additional instalment of DA to central government employees and DR to pensioners with effect from January 1, 2026, represents an increase of 2 per cent over the existing rate of 58 per cent of the Basic Pay/Pension, to compensate for the price rise.

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission, a statement said.

The government revises Dearness Allowance (DA) and Dearness Relief (DR) twice a year, in January and July, as part of its regular compensation framework for employees and pensioners. These adjustments are meant help salaries and pensions keep pace with rising prices.