Centre Hikes Dearness Allowance to 63% for Central Government Pensioners

The Union Cabinet has approved a 3% rise in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, raising the rates from 60% to 63% of basic pay and pension, respectively. The revised rates will be effective from 1 July 2026.

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The decision was approved at a Cabinet meeting chaired by Prime Minister Narendra Modi on 28 October 2026. The increase is intended to compensate employees and pensioners for the impact of rising prices.

The government estimates that the decision will benefit around 48.54 lakh central government employees and 68.71 lakh pensioners. The combined annual financial impact on the government exchequer is estimated at ₹10,016.10 crore.

How Much Will Salaries Increase?

The DA hike will increase the monthly allowance paid to eligible employees. The additional amount will depend on their basic pay.

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For example, an employee with a basic pay of ₹18,000 will receive an additional ₹540 per month. An employee drawing a basic pay of ₹29,200 will receive an additional ₹876 per month.

The revised rate will apply retrospectively from 1 July 2026. Eligible employees will receive arrears for the applicable period, subject to the government’s payment process.

DA and DR Revision Under the 7th Pay Commission

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The latest revision follows the accepted formula based on the recommendations of the 7th Central Pay Commission.

Dearness Allowance is paid to serving central government employees, while Dearness Relief is provided to eligible pensioners. The government generally revises these rates twice a year to account for changes in prices.

The latest increase will provide additional financial support to employees and pensioners during the July–December 2026 period.

This increase is in accordance with the accepted formula, which is based on the recommendations of the  7^th Central Pay Commission.