Union Cabinet Approves 3% DA Hike for Central Government Employees and Pensioners
By Suman Munshi | IBG NEWS
NEW DELHI, October 28, 2026: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 3% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from July 1, 2026. The decision aims to provide financial relief against rising prices and inflation.
Following the revision, the DA and DR rates will increase from the existing 60% to 63% of Basic Pay or Pension, respectively.
According to the Press Information Bureau (PIB), the decision is expected to benefit approximately 48.54 lakh Central Government employees and 68.71 lakh pensioners across the country.
Government Estimates Annual Expenditure of ₹10,016.10 Crore
The combined financial impact of the additional DA and DR instalments on the government exchequer is estimated at ₹10,016.10 crore annually.
The revised allowance is intended to help serving employees and pensioners manage the impact of rising living costs. Dearness Allowance is provided to serving Central Government employees, while Dearness Relief is extended to eligible pensioners.
Increase Based on 7th Pay Commission Formula
The latest revision follows the established formula based on the recommendations of the 7th Central Pay Commission.
The revised rates will apply retrospectively from July 1, 2026, in accordance with the Cabinet’s approval. The announcement provides an additional financial benefit to millions of government employees and pensioners.
Significant Relief for Employees and Pensioners
With the increase, eligible Central Government employees will receive DA at 63% of their Basic Pay, while pensioners will receive DR at 63% of their eligible pension.
The decision represents a further adjustment to government salaries and pension benefits in response to price movements, with the additional expenditure reflecting the scale of the beneficiary population.
Source: Press Information Bureau (PIB), Government of India, October 28, 2026.
