DA/DR Surge: Cabinet Approves 2% Hike for Central Employees, Boosting Pay for 118 Lakh Beneficiaries
The central government on Saturday approved a significant increase in Dearness Allowance (DA) and Dearness Relief (DR), providing an immediate financial boost to central government employees and pensioners. The cabinet meeting, chaired by Prime Minister Narendra Modi, sanctioned a 2 per cent hike to both allowances, effective from January 1, 2026.This crucial decision directly benefits approximately 50.46 lakh central government employees and an additional 68.27 lakh pensioners, addressing concerns regarding rising costs of living.
Details of the Dearness Allowance and Relief Increase
The hike represents an increase of 2 per cent over the existing rate of 58 per cent of the Basic Pay or Pension. This adjustment is designed to compensate for inflationary pressures and the general price rise witnessed across sectors.Information and Broadcasting Minister Ashwini Vaishnaw confirmed the approval while briefing the press. He noted that the action is taken in strict accordance with the established formula, which is anchored to the recommendations made by the 7th Central Pay Commission.
Financial Impact on the Central Exchequer
The cumulative financial impact of increasing both the Dearness Allowance and Dearness Relief is considerable. Ashwini Vaishnaw stated that the combined increase will cost the exchequer ₹ 6,791.24 crore per annum.This approval provides an additional instalment of DA and DR to the beneficiary groups, solidifying the financial support structure for India's vast workforce and retired personnel.
Addressing Cost of Living Concerns
The government's move underscores a commitment to adjusting employee compensation mechanisms against inflation. The increase ensures that the financial support provided to nearly 118 lakh beneficiaries keeps pace with economic realities.The implementation of this hike, effective January 1, 2026, ensures continuous financial stability for central government employees and their dependent pensioners.
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