The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved a 2 percent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners. This revision, effective from January 1, 2026, raises the allowance from 58 percent to 60 percent of the basic pay. The move is set to benefit approximately 50.46 lakh employees and 68.27 lakh pensioners, costing the exchequer roughly ₹6,791 crore annually. Calculated based on the Consumer Price Index for Industrial Workers (CPI-IW), this inflation-linked adjustment aims to preserve the purchasing power of fixed-income beneficiaries. While the announcement faced slight delays, beneficiaries will receive three months of arrears. This update comes amid growing calls from employee unions for the constitution of the 8th Pay Commission to further restructure central pay scales. DA Hike Update: Cabinet Approves 2% Increase in Dearness Allowance Ahead of 8th Pay Commission.

Cabinet Approves 2% DA Hike for Central Government Employees and Pensioners

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