Cabinet approves 3-point DA increase to 63%

The Union Cabinet approved a three-percentage-point increase in dearness allowance for central government employees, raising the rate from 60% to 63%. The corresponding dearness relief rate for pensioners will also rise, according to the government’s announcement. The revised rates take effect retrospectively from July 1, 2026, the official statement said. Dearness allowance is calculated as a share of an employee’s basic pay, while dearness relief applies to pensioners. The adjustment is intended to help offset the impact of rising prices. For an employee with basic monthly pay of Rs 18,000, the increase adds Rs 540 in monthly DA, bringing the allowance from Rs 10,800 to Rs 11,340 before other adjustments. The increase is Rs 750 for basic pay of Rs 25,000, Rs 1,062 for Rs 35,400 and Rs 1,347 for Rs 44,900. These amounts reflect the three-percentage-point change in DA, not total take-home pay. The government estimates the combined annual cost to the exchequer at Rs 10,016.10 crore. Its statement says the revision will benefit about 48.54 lakh central government employees and 68.71 lakh pensioners. The increase follows the accepted formula based on recommendations of the 7th...