The government’s decision will benefit around 48 lakh central government employees and 68 lakh pensioners, with an estimated annual financial impact of Rs 10,016 crore.
Highlights
- Government approves 3% hike in Dearness Allowance and Dearness Relief.
- DA and DR increase from 60% to 63% under the 7th Pay Commission.
- Revised rates will be effective retrospectively from July 1, 2026.
- Around 48 lakh central government employees and 68 lakh pensioners to benefit.
- DA/DR under the 6th Pay Commission rises from 262% to 269%.
- Rates under the 5th Pay Commission increase from 483% to 497%.
- Annual financial burden on the government estimated at Rs 10,016 crore.
Full Story
New Delhi, October 28, 2026: The Union Cabinet has approved a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, providing financial relief amid rising living costs. Following the revision, DA and DR will increase from 60% to 63% of basic pay or pension.
The revised rates will take effect retrospectively from July 1, 2026, meaning eligible employees and pensioners will also be entitled to arrears for the applicable period.
According to details presented during the Cabinet briefing, the decision is expected to benefit approximately 48 lakh central government employees and 68 lakh pensioners across the country.
DA Increased From 60% to 63%
Under the revised structure, employees covered by the 7th Central Pay Commission will receive Dearness Allowance at 63% of their basic salary, compared with the previous rate of 60%.
The government said the increase follows the accepted formula based on recommendations of the 7th Central Pay Commission.
Dearness Allowance is periodically revised to compensate government employees for the impact of inflation, while Dearness Relief provides similar support to pensioners.
How Much Will Employees Gain?
The 3-percentage-point increase will directly raise the monthly earnings of eligible employees, depending on their basic pay.
For example, an employee with a basic monthly salary of Rs 50,000 will receive an additional Rs 1,500 per month in Dearness Allowance.
Similarly, an employee drawing a basic salary of Rs 30,000 will see a monthly increase of Rs 900.
These calculations exclude other salary components and any applicable adjustments.
Higher Allowances Under 5th and 6th Pay Commissions
The Cabinet briefing also outlined revisions for employees and pensioners covered under earlier pay commission structures.
Under the 6th Central Pay Commission, DA and DR will increase by 7 percentage points, from 262% to 269% of basic pay or pension.
Meanwhile, beneficiaries covered under the 5th Central Pay Commission will receive an increase of 14 percentage points, taking the applicable rate from 483% to 497%.
These revisions will also take effect from July 1, 2026.
Rs 10,016 Crore Annual Financial Impact
The combined increase in Dearness Allowance and Dearness Relief is expected to impose an additional annual burden of approximately Rs 10,016 crore on the government.
The expenditure will cover revised payments to eligible employees and pensioners.
The decision is expected to provide additional purchasing power to beneficiaries, particularly as household expenses continue to rise.
Over 1.16 Crore Beneficiaries
The government’s decision will benefit approximately 1.16 crore people, including serving central government employees and retired personnel.
The retrospective implementation will also result in arrears becoming payable to eligible beneficiaries.
The increase forms part of the government’s periodic DA and DR revisions designed to help protect salaries and pensions against inflation.
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