The Union Cabinet, chaired by Narendra Modi, has approved a 2% increase in Dearness Allowance (DA) for central government employees. The move raises the DA from 58% to 60% of basic pay, offering financial relief amid rising inflation.
The decision was finalized during a Cabinet meeting on April 18, 2026, and is expected to benefit millions across the country.
Benefit Extended to Pensioners as Dearness Relief
In addition to employees, pensioners will also benefit from the hike. Dearness Relief (DR), which functions similarly to DA, has also been increased from 58% to 60%.
This ensures that retired government personnel receive improved financial support to cope with increasing living costs.
Effective From January 2026 with Arrears
The revised DA and DR rates will be implemented retrospectively from January 1, 2026. As a result, employees and pensioners will receive arrears for the past months.
The government has allocated approximately ₹6,791 crore annually to support this increase.
Who Will Benefit from the DA Hike?
The decision is expected to positively impact:
- Around 49.19 lakh central government employees
- Nearly 68.72 lakh pensioners
This makes it one of the most significant salary-related updates for the public sector workforce in 2026.
What is Dearness Allowance?
Dearness Allowance is a cost-of-living adjustment provided to government employees and pensioners. It helps offset the impact of inflation on fixed incomes.
The allowance is calculated as a percentage of basic salary and is revised twice a year, typically in January and July, based on the Consumer Price Index for Industrial Workers (CPI-IW).
Previous DA Revision
The last DA revision took place in October 2025, when the government approved a 3% increase, raising the allowance from 55% to 58%.
The latest hike continues the government’s effort to maintain purchasing power amid fluctuating inflation trends.
The 2% DA hike brings timely financial relief to millions of employees and pensioners. With arrears and increased monthly income, the decision reinforces the government’s commitment to supporting its workforce against rising living costs.
