The Union Cabinet on 28 March 2025 approved a 2% increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, effective from January 1, 2025, raising it from 53% to 55% of basic pay or pension.
This decision will benefit around 48.66 lakh employees and 66.55 lakh pensioners, with an estimated financial burden of Rs. 6,614.04 crore per year.
The increase follows the 7th Central Pay Commission’s recommendations to provide financial support against inflation.
