NEW DELHI, APRIL 18 — The Union Cabinet, chaired by Prime Minister Narendra Modi, sanctioned a 2 percent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on Saturday. The adjustment raises the allowance from 58 percent to 60 percent of the basic pay, providing a cost-of-living cushion against inflationary pressures.
According to a cabinet release, the hike will be applicable from January 1 of this year, ensuring that beneficiaries receive arrear payments for the preceding months. The government stated that the decision is designed to support the workforce and pensioners by offsetting the impact of rising prices on fixed incomes. The annual financial implication of this increase is estimated at ₹6,791 crore.
The allowance is a periodic revision based on the Consumer Price Index for Industrial Workers (CPI-IW), which is monitored by the Labour Bureau. Official records noted that this adjustment addresses the long-standing wait by the workforce for a revision to their compensation structure. This follows a previous 3 percent increase granted in October 2025, which had raised the rate to the previous 58 percent level.
The DA system serves as a fundamental mechanism to maintain the purchasing power of approximately 1.18 crore individuals, including both active employees and retired personnel. Government representatives affirmed that the revised rates will be implemented immediately to provide financial relief to the central workforce across the country.
