The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the release of an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners with effect from July 1, 2026, the Press Information Bureau (PIB) said.

Source: Press Information Bureau (PIB)

The revision is an increase of 3% over the existing rate of 60% of basic pay or pension, taking the DA/DR rate to 63%. PTI reported the same Cabinet decision, saying it covers over 1.16 crore central government employees and pensioners in total.

Source: PTI via Dailyworld

3%DA/DR increase approved
63%New DA/DR rate
48.54 lakhEmployees benefiting
68.71 lakhPensioners benefiting
Rs 10,016.10 croreCombined annual cost to the exchequer

According to the PIB release, the decision benefits about 48.54 lakh central government employees and 68.71 lakh pensioners, and the combined impact on the exchequer is estimated at Rs 10,016.10 crore per annum.

Dearness Allowance is revised twice a year, generally with effect from January 1 and July 1, and is linked to movements in the All-India Consumer Price Index for Industrial Workers. The current 60% rate followed a 2-percentage-point increase approved in April 2026, effective January 1, 2026.

Because the hike takes effect from July 1, the increased amount will be payable with arrears for the months since July. State governments usually take up DA revisions for their own employees separately, and no state announcement formed part of Wednesday's Cabinet decision.