The Centre has increased dearness allowance and dearness relief from 60% to 63%, effective July 1, 2026.
The hike will benefit 48.54 lakh central government employees and 68.71 lakh pensioners.
The increase will cost the government Rs 10,016.10 crore annually and follows the 7th Central Pay Commission formula.
Centre Hikes DA To 63% For Employees, Pensioners Ahead Of Diwali
The 3 percentage point increase in dearness allowance and dearness relief will take effect retrospectively from July 1, 2026, benefiting over 1.17 crore employees and pensioners.
Summary
The Centre has approved a three percentage point increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, raising both rates from 60% to 63%. The revised rates will take effect retrospectively from July 1, 2026, ahead of Diwali.
The decision was taken by the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday. According to Indian Express, the increase is intended to help employees and pensioners cope with rising prices. The government revises DA and DR twice a year based on inflation data linked to the All India Consumer Price Index for Industrial Workers (AICPI-IW).
The additional expenditure resulting from the increase in DA and DR is estimated at Rs 10,016.10 crore annually, according to the statement issued after the Cabinet meeting. Indian Express reported that the decision will benefit approximately 48.54 lakh central government employees and 68.71 lakh pensioners.
The Cabinet statement said it had “approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2026 representing an increase of 3% over the existing rates of 60% of the Basic Pay/Pension, to compensate against price rise.”
The increase follows the accepted formula based on the recommendations of the 7th Central Pay Commission, the Cabinet statement said.
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