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Cabinet Approves 2% DA Hike for Central Govt Staff, Pensioners

The Union Cabinet has approved a 2 percent increase in Dearness Allowance for central government employees and Dearness Relief for pensioners, raising the rate from 58% to 60%. This cost-of-living adjustment is designed to offset the impact of inflation on fixed incomes. The allowance is revised twice a year based on the Consumer Price Index for Industrial Workers. The decision follows a previous 3% hike approved in October 2025, which was effective from July 1 of that year.

Key Points: 2% DA Hike Approved for Central Govt Employees & Pensioners

  • 2% DA/DR hike approved
  • DA raised from 58% to 60%
  • Benefits lakhs of employees & pensioners
  • Offset impact of inflation
  • Linked to CPI-IW index
2 min read

Cabinet approves 2% Dearness Allowance hike for central government employees

Cabinet approves 2% Dearness Allowance increase, raising DA/DR from 58% to 60% to offset inflation for central government employees and pensioners.

"The adjustment serves to address the long-standing wait of the workforce for a revision in their compensation structure."

New Delhi, April 18

The Cabinet has approved a 2 per cent increase in Dearness Allowance for central government employees. This decision, finalized during a Cabinet meeting on Saturday, raises the allowance from the current rate of 58 per cent to 60 per cent. The adjustment serves to address the long-standing wait of the workforce for a revision in their compensation structure.

The 2 per cent hike also applies to Dearness Relief (DR) for pensioners, which similarly increases from 58 per cent to 60 per cent.

The Dearness Allowance is a fundamental cost-of-living adjustment designed to support government employees and pensioners. It functions specifically to offset the impact of inflation on fixed incomes. The allowance is calculated as a percentage of the basic pay and undergoes periodic revisions based on established inflation indices to maintain the purchasing power of the workforce.

The allowance, linked to inflation, is revised twice a year, typically in January and July. It is worked out based on the Consumer Price Index for Industrial Workers (CPI-IW), released monthly by the Labour Bureau under the Labour Ministry.

Earlier in October of 2025, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 3 per cent increase in Dearness Allowance for Central Government employees and Dearness Relief for pensioners, effective from July 1, 2025.

The decision raised the then-existing rate from 55 per cent to 58 per cent of the basic pay or pension, according to a release by the Cabinet.

The hike, aimed at offsetting the impact of inflation, was sought to benefit approximately 49.19 lakh Central Government employees and 68.72 lakh pensioners.

The total financial implication of the decision on the exchequer was estimated at Rs 10,083.96 crore annually.

The revision followed the formula based on the recommendations of the 7th Central Pay Commission.

Next, in March of this year, Madhya Pradesh Chief Minister Mohan Yadav chaired a cabinet meeting held at the state secretariat (Mantralaya), and the council of ministers gave a nod to various development works worth Rs 6,940 crore and the continuation of several schemes.

The Cabinet also approved Rs 82.39 crore for the Mahana Micro Irrigation Project in Rewa district, along with a 3 per cent increase in dearness allowance for government employees and dearness relief for pensioners w.e.f July 1, 2025, raising it to 58 per cent.

- ANI

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Reader Comments

S
Sarah B
Good news for my parents who are both central government pensioners. Every bit helps in this economy. The process seems systematic, linked to the CPI-IW. Transparency in how these decisions are made is appreciated.
A
Aditya G
While the intent is good, a 2% increase feels like a drop in the ocean against the actual inflation we are witnessing. Petrol, LPG, groceries – everything has skyrocketed. The formula needs a relook to provide meaningful compensation.
P
Priya S
This is a positive move. My father is a retired bank employee (falls under central schemes) and this DR increase will help. It's crucial that pensioners, who are on a fixed income, are not left behind. Hope the disbursement is timely.
M
Michael C
Interesting to see the scale - nearly 50 lakh employees and 68 lakh pensioners. The financial implication is over Rs 10,000 crore annually. It's a significant fiscal commitment, but supporting public servants and retirees is essential for a stable economy.
K
Kavya N
The article mentions states like MP also doing hikes. The real challenge is for employees in states with poor finances. The central hike is good, but we need a more uniform mechanism to protect all government staff from inflation, country-wide.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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