Centre hikes DA to 63% ahead of Diwali, 1.17 crore employees and pensioners to benefit

Mumbai (The Uttam Hindu) : The central government on Wednesday announced a 3 percent increase in dearness allowance (DA) and dearness relief (DR) for central government employees and professionals. This will benefit more than 11.7 million employees and pensioners.

The Union Cabinet chaired by Prime Minister Narendra Modi today approved the release of an additional instalment of dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners with effect from July 1, 2026, a government statement said.

To compensate for rising prices, DA/DR has been increased by 3 percent. This brings the DA/DR rate to 63 percent of basic pay/pension, up from 60 percent previously.

The increase in both dearness allowance and dearness relief will result in a total annual burden of ₹10,016.10 crore on the government treasury. This is being considered a Diwali gift from the central government to employees, as it will benefit approximately 48.54 lakh central government employees and 68.71 lakh pensioners. The statement further said that this increase is as per the approved formula based on the recommendations of the 7th Central Pay Commission.

Additionally, the Eighth Central Pay Commission is deliberating on matters related to pay and pensions. These discussions are expected to focus primarily on pay conditions and suggestions made by all stakeholders. The Eighth Central Pay Commission is chaired by former Supreme Court judge Ranjana Prakash Desai. Its members include former IAS officer Pankaj Jain, who serves as Member-Secretary. Pulak Ghosh, a professor of finance and a member of the Prime Minister's Economic Advisory Council, is also a member.

The suggestions received during these discussions will be taken into account when formulating the Commission's recommendations. The Commission's work could impact the financial interests of over 10 million employees and pensioners.