Central government employees and pensioners have received a fresh financial update after the Union Cabinet approved a 3-percentage-point increase in Dearness Allowance (DA) and Dearness Relief (DR). The revision raises the rate from 60% to 63% of basic pay or pension and will apply retrospectively from July 1, 2026.
The decision is expected to benefit around 48.54 lakh central government employees and 68.71 lakh pensioners.
How Much Will Salaries Increase?
The additional DA is calculated on basic pay, not on the entire salary package. The increase equals 3% of an employee’s basic pay.
For example, an employee with basic pay of ₹18,000 will receive an additional ₹540 per month. Someone with basic pay of ₹29,200 will receive an extra ₹876 per month, while an employee earning basic pay of ₹35,400 will get ₹1,062 more each month.
The actual amount depends on the employee’s basic pay and applicable service rules.
Arrears From July 2026
Because the revised rate takes effect from July 1, eligible employees and pensioners are entitled to the applicable arrears for the period before the revised rate is reflected in their payments. The final amount credited will depend on payroll and pension processing.
Employees should check their salary slips and official departmental communications for the exact arrears and revised DA amount.
Government’s Annual Expenditure
The combined annual financial impact of the DA and DR increase is estimated at ₹10,016.10 crore. The revision follows the existing formula based on the recommendations of the Seventh Central Pay Commission and is intended to help employees and pensioners manage rising living costs.
What Employees Should Know
The new rate is 63% of basic pay or pension, replacing the earlier 60%. DA applies to serving employees, while DR applies to eligible pensioners. The increase does not mean that every employee will receive the same additional amount, since the calculation varies with basic pay.
Beneficiaries should rely on official salary or pension records for confirmation of their individual payment and arrears.
