The Union Cabinet, chaired by Narendra Modi, approved a 2% increase in Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for pensioners, effective from 1 January 2026. With this revision, DA/DR has been increased from 58% to 60% of Basic Pay/Pension to offset inflation.
The decision will benefit around 50.46 lakh employees and 68.27 lakh pensioners, with an estimated financial burden of ₹6,791.24 crore annually. The hike is based on the 7th Central Pay Commission formula, which periodically revises allowances in line with inflation trends.
