The Union government has approved a 2% increase in dearness allowance (DA) for central government employees and pensioners, offering relief amid rising inflation.
According to sources, the Union Cabinet has cleared the hike, raising DA from 58% to 60% of basic pay. The decision is expected to benefit around 50 lakh central government employees and over 65 lakh pensioners, boosting their monthly income.
Salary Impact And Arrears
The hike will directly reflect in salaries and pensions. For instance, an employee with a basic pay of Rs 36,500 will now receive Rs 21,900 as DA at the revised 60% rate.
Importantly, the revised DA will be effective from January 1, 2026. This means employees will receive arrears for three months, January, February, and March, along with upcoming salaries.
The announcement comes as a major relief for employees who had been awaiting a revision amid increasing cost of living. Employee unions have also been pushing for broader reforms under the proposed 8th Pay Commission.
Why DA Is Revised
Dearness allowance is revised twice a year, typically in January and July, to offset the impact of inflation on government employees.
It is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW), released by the Labour Ministry, reflecting changes in the cost of essential goods.
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