In a major pre-Diwali announcement, the central government has approved a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, effective from July 1, 2026.
Union Minister Ashwini Vaishnaw announced the decision on Wednesday, October 28, 2026, noting that the revision will benefit approximately 1.16 crore individuals across the country.
Revised Rates and Financial Impact
With this 3% increase, the DA and DR rates will rise from the existing 60% to 63% of the basic pay or pension.
The revision is structured across various pay commissions as follows:
- 7th Central Pay Commission: DA/DR increased by 3% to reach 63%.
- 6th Central Pay Commission: DA increased by 7 percentage points, moving from 262% to 269% of the basic pay.
- 5th Central Pay Commission: DA increased by 14 percentage points, moving from 483% to 497% of the basic pay.
The cumulative annual financial implication of this hike for the national exchequer is estimated at ₹10,016 crore. The upward adjustment is designed to provide financial relief against inflation to roughly 48 lakh central government employees and 68 lakh pensioners.
Additional Major Cabinet Decisions
Alongside the DA hike, the Union Cabinet cleared several key infrastructure and welfare initiatives:
- PM Viksit Gram Swaraj Yojana: Allocation of ₹7,395 crore approved.
- Container Manufacturing Promotion Scheme: A ₹10,000 crore scheme aimed at boosting domestic container production.
- Khelo India Sports Goods and Manufacturing Scheme: An outlay of ₹1,856 crore to strengthen sports manufacturing ecosystems.
