New Delhi: The Union government has approved a 2 per cent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, with effect from January 1, 2026.
The decision, taken at a Cabinet meeting chaired by Prime Minister Narendra Modi, will benefit around 50.46 lakh employees and 68.27 lakh pensioners.
Briefing the media after the meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the increase is aimed at offsetting the impact of rising prices.
With the latest revision, the DA and DR rates will go up from 58 per cent to 60 per cent of basic pay and pension.
Financial impact
The government said the combined financial burden on the exchequer due to the increase in DA and DR will be about Rs 6,791.24 crore annually.
Officials said the revision follows the established formula linked to inflation trends, as recommended by the 7th Central Pay Commission.
What DA and DR mean
Dearness Allowance is provided to serving government employees, while Dearness Relief is extended to pensioners. Both are meant to compensate for changes in the cost of living and are revised periodically.
The adjustment is based on price index data and is usually announced twice a year.
Implementation timeline
The revised rates will be applicable from January 1, 2026, and arrears for the period from January will be paid accordingly.
Officials said the increase is part of the routine revision cycle and reflects the government’s policy of adjusting salaries and pensions in line with inflation.
Broader context
DA revisions are closely watched as they directly affect the income of government employees and pensioners across the country.
The increase also has a wider economic impact, as higher payouts can influence consumption patterns and spending in different sectors.
The latest decision comes amid ongoing efforts by the government to balance welfare measures with fiscal management.
