Cabinet Approves 2% Hike in Dearness Allowance and Dearness Relief
In a significant move, the Union Cabinet on Saturday gave its approval for a 2% increase in the dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners. This decision is set to provide financial relief to approximately 1.2 crore serving personnel and pensioners across the country.
Effective Date and Financial Implications
The hike is expected to take effect from January 1, as announced by Information and Broadcasting Minister Ashwini Vaishnaw. He stated that this revision will result in an additional fiscal outgo of Rs 6,791 crore for the government. The increase is designed to compensate employees and pensioners against the ongoing price rise, ensuring their purchasing power is maintained.
Revised DA Rate and Previous Adjustments
With this latest revision, the dearness allowance will rise to 60% of the basic pay for central government employees. This follows the previous adjustment in October, when DA and DR were increased from 55% to 58%, effective from July 1, 2025. The government has emphasized that this hike aligns with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
An official statement clarified that the decision is in accordance with established protocols to address inflation impacts. This regular revision mechanism helps safeguard the economic well-being of government staff and retirees, reflecting the administration's commitment to their welfare amidst economic fluctuations.
