The Central government on Saturday, April 18, hiked Dearness Allowance (DA) for central government employees by 2 per cent. The move will benefit as many as 50.46 lakh central government employees. The DA hike to Central government employees will come into effect from January 1, 2026.
The new DA hike of two per cent is an increase over the existing rate of 58 per cent in the Basic Pay. The hike now takes the Dearness Allowance to 60 per cent. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
For instance if a central government employees is earning ₹50,000 as basic pay, s/he will see a hike of ₹1,000 in their basic pays.
Basic pay ₹50,000
Old DA (58 per cent) = ₹29,000
New DA (60 per cent) = ₹30,000
The decision to hike DA was taken in a Cabinet meeting. Information and Broadcasting (I&B) Minister Ashwini Vaishnaw also announced hike in Dearness Relief (DR) for pensioners. The move will affect 68 lakh pensioners.
The Union minister said, “Another very big decision was taken today. I would like to extend my heartiest congratulations. DA and DR have been increased for all our central government employees and pensioners, which will cost the Government of India a total of Rs. 6,791 crore. Basically, DA and DR will become 60% of the basic pay from January 1, 2026. It has been increased by 2%, from 58% to 60%. It will become 60% of the basic pay. There are a total of about 50 lakh employees and 68 lakh pensioners of the Government of India. This will be a huge benefit for all of them.”
Dearness allowance is government-mandated payment designed to help soften the blow of inflation for employees of the central government. The allowances are revised twice a year based on the consumer price index.
India’s Consumer Price Index (CPI) rose to 3.40 per cent year-on-year in March from 3.21 per cent in February, government data showed earlier this month. The uptick in March was led by food prices — a key constituent of the country’s consumer price index — which rose 3.87% in March and from 3.47% in February.
Price pressures have increased due to higher cooking gas costs, although government tax cuts have shielded consumers from the full impact of higher global oil prices.
