Politics · India · 3 hrs ago
Cabinet raises central government staff and pensioners’ allowance by 3%
India’s Union Cabinet approved a 3-percentage-point allowance increase for central government employees and pensioners ahead of Diwali.
The increase affects about 4.85 million employees and 6.87 million pensioners, according to the government figures cited.
Dearness allowance and dearness relief are linked to basic pay and are meant to help people cope with inflation.
The new rate rises from 60% to 63% of basic pay for the main employee and pensioner groups.
The change will apply retroactively from July 1, 2026, so eligible recipients are due the increase from that date.
The government says the higher payments will cost about ₹10,016 crore a year.
The allowance is generally revised twice a year, often in January and July.
The Union Cabinet approved a three-percentage-point increase in dearness allowance for central government employees and dearness relief for pensioners.
The rates rise from 60% to 63% of basic pay, with the increase effective from July 1, 2026.
The decision benefits about 4.85 million employees and 6.87 million pensioners, according to The Hindu.
The combined annual cost to the government is about ₹10,016 crore.
The increase follows the formula based on recommendations of the Seventh Central Pay Commission.
- Who
- Central government employees and pensioners.
- What
- The Union Cabinet approved a 3-percentage-point increase in dearness allowance and dearness relief, bringing the rates to 63% of basic pay.
- When
- Approved on October 28, 2026; effective from July 1, 2026.
- Where
- India.
- Why
- The allowance is intended to help employees and pensioners cope with inflation.
This story does not have two clearly opposing sides.
The previous increase was announced, raising dearness allowance and relief by two percentage points to 60% from January 1.
The Union Cabinet approved a three-percentage-point increase in dearness allowance and relief.
The new rates take effect retrospectively, according to the reports.
- DA and DR rate
- 63% of basic pay, up from 60%
- Increase
- 3 percentage points
- Effective date
- July 1, 2026
- Employees benefiting
- 4.85 million, according to The Hindu
- Pensioners benefiting
- 6.871 million, according to The Hindu
- Annual cost
- ₹10,016 crore, as reported by the Economic Times
5 sources
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Cabinet approves 3% hike in dearness allowance for central government employees
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