3% Hike in Central Government Employees' Dearness Allowance, Effective from July: Festive Gift Ahead of Diwali for 48 Lakh Employees and 68 Lakh Pensioners
Diwali has become a bit brighter for 48 lakh central government employees and 68 lakh pensioners. Just 10 days before the festival, the government has announced a 3% increase in Dearness Allowance (DA). Following this decision, the DA will rise to 63%, costing the government ₹10,000 crore.
Cabinet Decision
Approval: The Cabinet approved the new rates on Wednesday, October 28.
Effective Date: The new rates will take effect from July 1, 2026.
Arrears: Back pay for the previous months will also be deposited into accounts before Diwali.
Previous Increase: In April, DA was increased by 2%, bringing it to 60%.
3 Major Highlights of the Decision
Benefit for Minimum Basic Pay Holders:
For those with a basic pay of ₹18,000, a 3% hike will mean an addition of ₹540 per month.
Benefit for Higher Pay-Scale Holders: Senior officials with a basic salary of ₹56,100 will see their monthly salary increase by approximately ₹1,683.
Payment of Arrears: Since the decision is effective from July, employees will receive arrears for July, August, and September alongside their upcoming salary.
Revision Takes Place Twice a Year
The central government revises DA and DR for employees and pensioners twice every year. The first revision typically takes effect in January, and the second in July. The government assesses inflation based on figures from the All India Consumer Price Index (AICPI-IW) and increases the allowance accordingly.
What Are DA and DR?
DA (Dearness Allowance): An allowance provided to government employees to offset the cost of living, calculated as a percentage of the basic salary.
DR (Dearness Relief): Provided to retired employees (pensioners) based on their basic pension. Its primary purpose is to mitigate the impact of rising prices of everyday items.
