Union Cabinet Approves 3% DA Hike for Central Employees Ahead of Diwali
The Union Cabinet has sanctioned a 3% increase in Dearness Allowance for central government employees, effective July 1, 2026.
The DA increase will benefit over 1.17 crore individuals, including 48.54 lakh employees and 68.71 lakh pensioners.
This decision is expected to cost the government approximately Rs 10,000 crore.
The DA will rise from 60% to 63% of basic pay and pension.
In a significant move ahead of the festive season, the Union Cabinet approved a 3% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on Wednesday. This decision, announced by Information and Broadcasting Minister Ashwini Vaishnaw, will take effect from July 1, 2026, and is expected to benefit over 1.17 crore individuals, including 48.54 lakh employees and 68.71 lakh pensioners.
The Cabinet, chaired by Prime Minister Narendra Modi, emphasized that this increase serves as a Diwali gift for government employees and pensioners. Vaishnaw highlighted that the DA and DR rates will rise from 60% to 63% of basic pay and pension, respectively. This adjustment is part of the government's ongoing efforts to assist employees and pensioners in coping with inflationary pressures.
The financial implications of this increase are substantial, with an estimated cost of around Rs 10,000 crore for the government. This latest hike follows a previous 2% increase approved in April, which had raised the DA and DR rates to 60%. The government typically revises these allowances biannually, in January and July, to ensure that employees and pensioners can manage the rising cost of living.
DA is designed to help government employees maintain their purchasing power amid inflation, while DR serves a similar purpose for pensioners. Both allowances are crucial in offsetting the impact of price increases on the livelihoods of those dependent on government salaries and pensions.
Looking ahead, the government will continue to monitor economic conditions and inflation trends, with the next review of DA and DR scheduled for January 2027. This ongoing adjustment process is vital for ensuring that the financial well-being of government employees and pensioners is safeguarded in the face of changing economic circumstances.
