Centre announces 3% DA hike for govt employees, pensioners ahead of Diwali

The central government has approved an increase in Dearness Allowance (DA) and Dearness Relief (DR) by three per cent, effective from July 1 this year, Union minister Ashwini Vaishnaw said on Wednesday.The DA for central government employees and DR for pensioners are set to increase from 60 per cent to 63 per cent of basic pay or pension, effective July 1, 2026, said Vaishnaw, announcing the hike.Over 1 crore employees, pensioners to benefitThe increase in DA and DR will have a combined annual financial implication of ₹10,016 crore for the government exchequer, he said, adding that it is expected to benefit around 48 lakh central government employees and 68 lakh pensioners.

The revision is aimed at providing relief against rising prices by adjusting the allowances paid to serving employees and pensioners.The hike will also revise DA rates for employees under the 6th and 5th Central Pay Commission (CPC) pay scales. For those under the 6th CPC, DA will rise from 262 per cent to 269 per cent of basic pay, an increase of seven percentage points. For employees under the 5th CPC, the allowance will increase from 483 per cent to 497 per cent of basic pay, a rise of 14 percentage points.

The revised rates will be effective from July 1, 2026. The increase in DA and DR will have a combined annual financial implication of ₹10,016 crore for the government exchequer. It is expected to benefit around 48 lakh Central Government employees and 68 lakh pensioners. The revision is aimed at providing relief against rising prices by adjusting the allowances paid to serving employees and pensioners.The government also approved allocation of ₹7,395 crore for PM Viksit Gram Swaraj Yojana among other Cabinet decisions.Container manufacturing promotion scheme worth ₹10,000 crore, Khelo India Sports Goods and Manufacturing scheme worth ₹1,856 crore were also part of the list of Cabinet decisions.