The Government of India has approved a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, effective January 1, 2026. With this revision, the DA/DR rate rises from 58% to 60% of basic pay and pension, according to official announcements following the latest Union Cabinet meeting.

The decision will benefit approximately 50 lakh central government employees and around 68 lakh pensioners across the country. The total annual financial implication of the increase has been estimated at ₹6,791 crore, as per government sources.

Dearness Allowance for employees and Dearness Relief for pensioners are revised periodically to compensate for price rise and protect real income against inflation. These revisions are based on changes in the All India Consumer Price Index (AICPI), in line with the recommendations of the 7th Central Pay Commission framework currently in force.

The latest hike follows the established biannual revision cycle, typically announced in March and September, with retrospective effect from January and July respectively. Officials confirmed that the revised rates will be reflected in upcoming salary and pension disbursements, and arrears from January 2026 are expected to be paid as per standard government procedures.

The increase comes amid ongoing efforts by the Government of India to provide financial relief to its workforce and pensioners in response to rising living costs. The DA component constitutes a significant portion of overall compensation for government employees and is closely watched as an indicator of inflation-linked income support.

The announcement was part of a series of decisions taken during the recent Union Cabinet meeting, which also addressed infrastructure spending and other economic measures, reflecting the government’s continued focus on employee welfare and fiscal management.