Cabinet approves 2% dearness allowance hike for central govt employees | Economy & Policy News

The Union Cabinet on Saturday authorised a two per cent hike in Dearness Allowance (DA) for Central authorities employees and a corresponding enhance in Dearness Relief (DR) for pensioners, Union Minister Ashwini Vaishnaw stated at a press convention.  The hike raises DA and DR to 60 per cent of fundamental pay and pension, from the prevailing 58 per cent, and might be efficient from January 1, 2026.  “The decision will benefit approximately 50.46 lakh Central Government employees and 68.27 lakh pensioners,” the minister stated.  He added that the mixed monetary influence on the exchequer resulting from this enhance is estimated at ₹6,791.24 crore every year.  The DA was final revised in October, when it was elevated from 55 per cent to 58 per cent, efficient July 1, 2025, with arrears subsequently paid out to each employees and pensioners.  The authorities critiques and revises DA and DR twice a 12 months, in January and July, as a part of its compensation mechanism. The changes, based mostly on the components really useful by the seventh Central Pay Commission, are aimed toward offsetting inflation and defending the buying energy of presidency employees and retirees.