In a move that brings some financial relief, the Union Cabinet has approved a 2% increase in Dearness Allowance (DA) for central government employees, said sources. With this revision, DA will rise from 58 per cent to 60 per cent of basic pay. The change will come into effect from January 2026.
The increase will not only help serving employees but also pensioners, who will receive a similar rise in Dearness Relief (DR). This ensures that retired personnel also get support to manage rising costs.
What it means for salaries
The hike will lead to a modest increase in monthly income. For example, an employee with a basic salary of Rs 30,000 will now get about Rs 600 extra per month. While the increase may seem small, it still adds to overall earnings and helps balance everyday expenses.
Based on inflation trends
Dearness Allowance is revised twice every year once in January and again in July. These changes are based on inflation data, especially the Consumer Price Index for Industrial Workers (CPI-IW). The latest increase reflects current inflation levels, which have been relatively stable compared to earlier periods.
The decision is expected to benefit more than one crore employees and pensioners across the country. It provides a steady boost to income, especially at a time when living costs remain high. The DA hike comes as employee groups continue to push for larger salary revisions. These demands are connected to the proposed 8th Pay Commission, which is likely to review the overall pay structure.
There are also suggestions to increase the fitment factor, which could lead to a significant jump in minimum basic pay in the future.
