Cabinet raises DA and DR by 3% to 63% for central employees and pensioners

The Union Cabinet on 28 October 2026 approved an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from 1 July 2026. The increase is 3 percentage points over the existing rate of 60% of basic pay or pension, taking it to 63%, according to the Ministry of Finance.

What Happened

Dearness Allowance is paid to serving employees, and Dearness Relief to pensioners, to make up for rising prices. The Ministry of Finance said the Cabinet approved the new instalment with effect from 1 July 2026, raising the rate by 3% over the existing 60% of basic pay or pension.

The government put the combined cost of the increase in both DA and DR at Rs 10,016.10 crore a year. The ministry said the decision will benefit about 48.54 lakh Central Government employees and 68.71 lakh pensioners.

According to the release, the increase follows the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

What It Means

For a Central Government employee or pensioner, the change is worked out on basic pay or basic pension. An increase of 3 percentage points works out as follows:

• On a basic pay or pension of Rs 30,000 a month, DA or DR rises by Rs 900 a month, from Rs 18,000 to Rs 18,900.
• On Rs 50,000 a month, it rises by Rs 1,500, from Rs 30,000 to Rs 31,500.
• On Rs 1,00,000 a month, it rises by Rs 3,000, from Rs 60,000 to Rs 63,000.

These figures are simple illustrations on basic pay or pension alone. The revised rate applies from 1 July 2026, as the release states; it does not give the date on which the higher amount will be paid. Employees and pensioners can check the revised DA or DR in their salary slip or pension statement once it is credited. The release covers only Central Government employees and central pensioners; it does not mention state government employees or pensioners, whose rates are set separately by their states.

Source: PIB press release