New Delhi: In a Diwali gift for central government employees and pensioners, the Centre has approved an increase in Dearness Allowance (DA) and Dearness Relief
(DR) from 60 per cent to 63 per cent. Union minister Ashwini Vaishnaw announced the Cabinet decision on Wednesday. The revised rates will apply from July 1, 2026. Employees will receive DA at 63 per cent of their basic pay, while pensioners will receive DR at the same rate on their basic pension.
Around 1.16 crore employees and pensioners to benefit
Vaishnaw said the revision would benefit around 48 lakh central government employees and 68 lakh pensioners. Together, these two groups account for about 1.16 crore beneficiaries.
The increase will cost the government exchequer Rs 10,016 crore a year, he said. This amount covers the combined annual financial impact of the DA and DR revision. The government adjusts these allowances to provide relief against rising prices. The latest decision raises the payments linked to basic pay and basic pension for the covered employees and pensioners.
Revised rates for fifth and sixth pay commission scales
The decision also changes DA rates for employees who draw salaries under the Sixth and Fifth Central Pay Commission pay scales. These employees will receive revised allowances under their respective pay structures.
For employees under the Sixth Central Pay Commission, DA will rise from 262 per cent to 269 per cent of basic pay. This represents an increase of seven percentage points. For those under the Fifth Central Pay Commission, DA will increase from 483 per cent to 497 per cent of basic pay, a rise of 14 percentage points.
Both revisions will take effect from July 1, 2026, the same date as the increase in DA and DR to 63 per cent.
Cabinet clears village and manufacturing schemes
Alongside the allowance revision, the government approved an allocation of Rs 7,395 crore for PM Viksit Gram Swaraj Yojana.
The Cabinet also cleared a container manufacturing promotion scheme worth Rs 10,000 crore. Another approval covered the Khelo India Sports Goods and Manufacturing scheme, worth Rs 1,856 crore. The three scheme approvals together involve Rs 19,251 crore, separate from the annual cost of the DA and DR increase.
