Information and Broadcasting Minister Ashwini Vaishnaw announced the decision after the Cabinet meeting chaired by Prime Minister Narendra Modi. The revision will apply retrospectively from 1 July 2026, with arrears due to eligible employees and pensioners from that date.
“TThe Union Cabinet chaired by the Prime Minister Narendra Modi today has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2026 representing an increase of 3% over the existing rates of 60% of the Basic Pay/Pension, to compensate against price rise,” the government said in its official statement.
The revision will benefit 48.54 lakh central government employees and 68.71 lakh pensioners, taking the total covered population to over 1.17 crore. The combined impact on the exchequer, factoring both the DA and DR components, is pegged at ₹10,016.10 crore per annum.
The official release added that the increase “is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.”
The previous DA revision came in April 2026, when the Centre raised the allowance by 2 percentage points from 58% to 60%, effective 1 January 2026. Dearness allowance is paid to serving central government employees to offset the impact of inflation on living costs, while dearness relief performs the same function for retired employees drawing a pension.
The timing of the announcement, days before Diwali, follows a pattern of the government clearing DA revisions around major festivals. Central government salary and pension outlays feed directly into consumer spending patterns across urban and semi-urban India, and payroll teams at central ministries, PSUs and defence establishments will need to process arrears alongside the November salary cycle. The revised rate also serves as a benchmark that several state governments and autonomous bodies track when announcing their own DA revisions.
