Cabinet Approves 2% DA Hike to 60% for Central Employees

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 2 percent increase in Dearness Allowance for central government employees and Dearness Relief for pensioners on Saturday, raising the rate from 58 percent to 60 percent of basic pay or pension effective January 1, 2026.

The adjustment, announced in New Delhi following the cabinet meeting, aims to offset the effects of inflation on fixed incomes. It will benefit approximately 50.46 lakh central government employees and 68.27 lakh pensioners, according to an official statement. The annual financial impact on the national exchequer is estimated at Rs 6,791.24 crore, covering both the allowance and relief components. The increase follows a formula recommended by the 7th Central Pay Commission and is calculated based on the 12-month average of the Consumer Price Index for Industrial Workers, released by the Labour Bureau.

Dearness Allowance serves as a cost-of-living adjustment, revised twice yearly in January and July to maintain purchasing power amid rising prices. For an employee with a basic salary of Rs 50,000, the hike adds Rs 1,000 monthly to the allowance, boosting total take-home pay by that amount before...