The Union Cabinet approved a three-percentage-point increase that benefits more than 1.16 crore central government employees and pensioners and costs the exchequer Rs 10,016 crore annually.

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• The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the increase in Dearness Allowance and Dearness Relief on October 28, 2026.
• Union Minister Ashwini Vaishnaw said DA and DR will rise from 60 per cent to 63 per cent of basic pay and pension.
• The revised rates take effect from July 1, 2026.
• More than 1.16 crore central government employees and pensioners will benefit from the hike.
• The combined annual cost to the exchequer will be Rs 10,016 crore.
• The revision follows the formula based on the recommendations of the 7th Central Pay Commission.
• DA is paid to serving employees as a percentage of basic pay, while DR is the corresponding benefit for pensioners.
• Both are meant to offset the impact of rising prices.
• The government revises DA and DR twice a year, usually in January and July.
• The previous revision, approved in April 2026, raised the rate by two percentage points to 60 per cent.
• The new rates apply for the July-December 2026 period until the next scheduled revision.