The Indian government has approved a 2% hike in dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners. The increase, effective from January 1, 2026, will raise DA to 60% of basic pay and benefit over 1.2 crore individuals across the country.

Government Approves 2% DA Hike

In a major relief for central government staff, the Cabinet has given the green signal to increase the dearness allowance (DA) and dearness relief (DR) by 2%. This move will directly benefit around 1.2 crore employees and pensioners.

The decision aims to provide financial support amid rising inflation and cost of living. With this revision, DA will now reach 60% of the basic salary, offering improved monthly earnings for government workers.

According to official statements, the DA hike will result in an additional financial burden of approximately ₹6,791 crore on the government.

Union minister Ashwini Vaishnaw confirmed the approval and stated that the increase aligns with the government’s policy to offset the impact of inflation on employees and retirees.

Effective Date and Previous Revision

The revised DA and DR rates will be applicable from January 1, 2026.

Previously, the government had increased DA from 55% to 58% in October 2025, which was effective from July 1, 2025. The latest hike continues the trend of periodic revisions aimed at maintaining employees’ purchasing power.

Based on 7th Pay Commission Formula

The DA revision follows the standard calculation formula recommended under the 7th Central Pay Commission.

This formula takes into account inflation trends and cost of living adjustments, ensuring that salaries remain aligned with economic conditions.

Who Will Benefit from DA Hike?

The 2% increase in DA and DR will benefit:

• Central government employees
• Pensioners
• Family pension holders

Overall, more than 1.2 crore individuals are expected to gain from this decision, making it one of the significant financial updates for government workers in 2026.

Why DA Hike Matters

Dearness Allowance plays a crucial role in protecting employees’ income against inflation. Even a small increase can have a meaningful impact on monthly earnings and long-term financial stability.

This latest revision reflects the government’s ongoing effort to support its workforce amid changing economic conditions.

The approval of a 2% DA hike brings positive news for central government employees and pensioners. With DA rising to 60% of basic pay, the move not only boosts income but also helps manage rising living costs effectively.

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