Dearness allowance hike: DA/DR up by 2% to 60%, relief for central government employees and pensioners

Dearness allowance hike: In a significant relief to central government employees and pensioners, the Union Cabinet on Saturday (April 18) approved a 2 per cent increase in Dearness Allowance (DA). With this revision, DA rises from 58 per cent to 60 per cent of basic pay.

The revised rates will come into effect from January 2026. Pensioners will receive a corresponding increase in Dearness Relief (DR).

"The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be ₹ 6791.24 crore per annum. This will benefit about 50.46 lakh Central Government employees and 68.27 lakh pensioners," said Information and Broadcasting Minister Ashwini Vaishnaw while briefing about decisions taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.

Dearness Allowance is a crucial component of the salary structure for government employees, designed to offset the impact of inflation. As the cost of living rises, periodic revisions in DA/DR help maintain the purchasing power of salaries and pensions.

Dearness Allowance percent = ((Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76) *100

Delay in DA/DR hike had sparked concerns

A delay in the announcement of DA/DR revision for central government employees and pensioners had earlier led to growing dissatisfaction among stakeholders, according to reports.

The National Council (Staff Side) of the Joint Consultative Machinery (NC-JCM) had written to the Cabinet Secretary, urging timely intervention to expedite the long-pending decision.

However, the issue has now been addressed following the Cabinet’s approval of a 2% hike, taking DA/DR to 60%, bringing relief to beneficiaries.