The financial impact of this revision has been estimated at around Rs 6,791.24 crore annually for the central government.

Big Relief: Cabinet Approves 2% DA Hike for about 50 Lakh Govt Employees and 68 Lakh Pensioners

Nearly 50.46 lakh central government employees and 68.27 lakh pensioners will receive higher monthly benefits after the Union Cabinet approved a 2 per cent increase in Dearness Allowance (DA) and Dearness Relief (DR), aimed at easing the pressure of inflation.

The revised rates will be implemented from January 1, 2026, and will raise the existing 58 per cent DA and DR structure linked to basic pay and pensions. The decision is expected to provide partial financial relief to families dependent on fixed salaries and retirement incomes.

The financial impact of this revision has been estimated at around Rs 6,791.24 crore annually for the central government. Officials said the adjustment follows the established inflation-linked formula under the Seventh Central Pay Commission framework.

The announcement came after a Cabinet meeting chaired by Prime Minister Narendra Modi, with Information and Broadcasting Minister Ashwini Vaishnaw confirming the decision. The revision applies to both serving employees and retired personnel under the central government.

Dearness Allowance is provided to employees to offset rising living costs, while Dearness Relief supports pensioners facing the same inflationary pressures after retirement. These adjustments are periodically made based on inflation trends to help maintain purchasing power.

The latest hike comes at a time when households continue to face fluctuations in essential commodity prices, making the revision a significant step in stabilising income value for millions of beneficiaries across the country.