Central Government Employees To Get 3 Per Cent DA Hike, Rate Rises To 63 Per Cent

The Union Cabinet, on October 28, has approved a 3 per cent increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners. The revision will take effect retrospectively from July 1, 2026, taking the DA and DR rate from 60 per cent to 63 per cent of basic pay and pension, respectively.

This hike will cover around 48.54 lakh serving central government employees and 68.71 lakh pensioners. The government has estimated the annual financial impact of the revision at Rs 10,016.10 crore.

DA Hike And Arrears From July 2026

The 3 per cent revision will raise the monthly allowance payable to eligible employees and pensioners. Since the new rate applies from July 1, beneficiaries will receive the difference between the old and revised rates for July, August, September and October, along with their October 2026 salary.

The arrears will depend on each beneficiary's basic pay or pension. Employees with higher basic pay will receive a bigger hike in rupees than those with lower basic pay, while pensioners will receive the corresponding adjustment based on their basic pension.

The hike is meant to offset the impact of inflation. The revised rate will apply to eligible beneficiaries covered by the central government's DA and DR framework.

DA And DR Calculation

Dearness relief is calculated on a pensioner's basic pension. DA, on the other hand, is counted as a percentage of the employee's basic salary. The central government revises DA and DR twice a year, usually once in January and later in July.

The increase points depend on the changes in the All India Consumer Price Index for Industrial Workers (AICPI-IW), which measures price changes faced by industrial workers.

DA is paid in cash and is taxable. The amount credited to an employee therefore depends on the applicable DA rate and basic pay, along with any relevant deductions.

The previous revision took effect from January 1, 2026. The latest increase raises the rate by three percentage points, bringing the allowance to 63 per cent.

The next regular DA review is expected in January 2027 under the twice-yearly revision schedule. The eventual increase will depend on the inflation data and the government's decision.