Dearness Allowance rate hike confirmed: DA increased by 3% for Central Govt employees; check details

Dearness allowance rate hike announcement on October 1, 2025: Ahead of Dussehra and Diwali, the Union Cabinet has decided to increase the rate for Dearness Allowance (DA) and Dearness Relief (DR) by 3% for central government employees and pensioners.

Ashwini Vaishnaw, Minister for Railways, Information & Broadcasting, Electronics & Information Technology, announced the DA/DR hike decision during Cabinet briefing on Wednesday, October 1, 2025.

After the latest hike, the DA/DR rate for Central Govt employees and pensioners will increase from 55 per cent to 58 per cent of basic pay and pension, respectively.

Vaishnaw said that the DA/Dr hike would benefit 49.2 lakh employees and 68.7 lakh pensioners of the Central Government. The financial implication of the hike announced before Dussehra and Diwali will be around ₹10,084 crore.

The DA/DR hike will take effect from July 1, 2025 and arrears for the last three months (July, August, and September) will be paid to employees.

What the Cabinet said

"The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f 01.07.2025 representing an increase of 3% over the existing rate of 55% of the Basic Pay/Pension, to compensate against price rise," the Union Cabinet said in a press release.

"The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be ₹10,083.96 crore per annum. This will benefit about 49.19 lakh Central Government employees and 68.72 lakh pensioners," it added.

The Dearness Allowance/Dearness Relief rates have been increased in accordance with the accepted formula recommended by 7th Central Pay Commission.