The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2026 representing an increase of 2% over the existing rate of 58% of the Basic Pay/Pension, to compensate against price rise.

The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be Rs.6791.24 crore per annum. This will benefit about 50.46 lakh Central Government employees and 68.27 lakh pensioners.

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. 

Dearness Allowance revision approved for Central Government employees and pensioners to offset price rise from 2026. An additional instalment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners has been approved with effect from 01.01.2026, increasing the existing rate by 2% to 60% of basic pay or pension. The increase is intended to compensate for price rise and operates in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission.