Diwali gift for central government employees! Dearness Allowance increased by three per cent

NEW DELHI: It is good news for Central Government employees and pensioners ahead of Diwali. The Union Cabinet approved a 3 per cent increase in Dearness Allowance (DA) and Dearness Relief (DR). This decision was taken in the Union Cabinet meeting chaired by Prime Minister Narendra Modi.

Minister Ashwini Vaishnaw announced the decision at the meeting. The decision is based on the recommendations of the 7th Pay Commission. With this, the DA has increased from the existing 60 per cent to 63 per cent.

The increase will be implemented with retrospective effect from July 1, 2026. Consequently, employees and pensioners will be entitled to arrears accruing from July onwards. Reports indicate that this decision by the Central Government will benefit approximately 48 lakh employees and 68 lakh pensioners. The hike in the Dearness Allowance will result in an additional annual financial burden of approximately Rs 10,016 crore.

The Central Government typically revises the Dearness Allowance (DA) and Dearness Relief (DR) for employees and pensioners twice a year. These revisions are generally implemented with effect from the months of January and July. In April 2026, the Dearness Allowance was increased by two per cent.