Cabinet approves Dearness Allowance to Central Government employees and Dearness Relief to Pensioners

The Union Cabinet chaired by the Prime Minister has approved the release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners effective from July 1, 2026. The increase represents a 3% hike over the existing rate of 60% of the Basic Pay or Pension, designed to compensate against price rises. The combined financial impact on the exchequer is estimated at Rs. 10,016.10 crore per annum, benefiting approximately 48.54 lakh Central Government employees and 68.71 lakh pensioners. This decision follows the accepted formula based on recommendations of the 7th Central Pay Commission.