New Delhi, October 28, 2026: There is good news for Central Government employees and pensioners as the Union Cabinet has approved a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR), bringing a welcome dose of festive cheer to millions of families.
The decision was taken on Wednesday, October 28, at a Cabinet meeting chaired by Prime Minister Narendra Modi. The additional instalment will be effective from July 1, 2026, and is aimed at helping employees and pensioners cope with rising prices.
With the latest revision, the DA and DR rates will increase from 60% to 63% of Basic Pay and Basic Pension, respectively. The increase offers financial relief to serving employees as well as retired government personnel, many of whom rely on these payments to manage their household expenses.
Over 1.17 Crore Employees and Pensioners to Benefit
The announcement is expected to benefit approximately 48.54 lakh Central Government employees and 68.71 lakh pensioners. Together, the two groups account for around 1.17 crore beneficiaries who stand to gain from the revised rates.
For government households, the additional amount could provide some breathing room as they manage everyday expenses, from groceries and utility bills to healthcare and other essential needs. Coming during the festive season, the increase may also offer families greater flexibility in planning their celebrations.
Government to Spend Over Rs 10,000 Crore Annually Over DA Hike
The combined annual impact of the DA and DR hike on the government exchequer is estimated at Rs 10,016.10 crore.
The revision follows the established formula based on the recommendations of the 7th Central Pay Commission. Dearness Allowance is paid to serving government employees, while Dearness Relief is provided to pensioners to help offset the impact of inflation.
With the revised rates effective from July 1, eligible employees and pensioners can look forward to the benefits of the latest increase in their DA and DR.
For millions of government families, the Cabinet’s decision brings a welcome financial boost and an added reason to celebrate the festive season.
