New Delhi, Apr 18: The Union Cabinet on Saturday approved a 2 per cent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, providing financial relief to lakhs of beneficiaries across the country.The decision will benefit around 50.46 lakh employees and 68.27 lakh pensioners.
The additional financial burden on the government due to this revision is estimated at ₹6,791.24 crore annually. The hike, effective from January 1, 2026, raises the DA/DR rate from the existing 58 per cent of basic pay or pension by 2 per cent. The revision has been made in line with the formula recommended by the 7th Central Pay Commission to help cushion the impact of rising prices.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi.
Briefing reporters after the meeting, Union Minister Ashwini Vaishnaw said the increase would place an additional annual burden of Rs 6,791.24 crore on the exchequer.The revised DA and DR will come into effect from January 1, 2026, and mark a 2 per cent rise over the existing 58 per cent rate of Basic Pay and Pension. The increase has been approved to offset the impact of rising prices.
The revised rates have been fixed in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission.Meanwhile, reacting to the Cabinet decision, Union Home Minister Amit Shah described it as a major gift from the Modi government to central government employees.
In a post on social media, Amit Shah said that the Cabinet had approved a 2 per cent increase in Dearness Allowance for employees and Dearness Relief for pensioners, effective from January 1, 2026.He said the decision reflects the Modi government’s commitment towards the financial security of employees and their families.
