Cabinet's 2% DA Hike Eases Inflation Impact for Government Employees

On Saturday, the Union Cabinet approved a 2% increase in the Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, officially taking the allowance from 58% to 60% of the Basic Pay/Pension. This move is aimed at mitigating inflation impacts, costing the exchequer Rs 6,791 crore.

Information and Broadcasting Minister Ashwini Vaishnaw highlighted that the decision will benefit over 50 lakh central government employees and 68 lakh pensioners. He expressed enthusiasm over the decision, noting the substantial financial commitment made by the Government of India to support its workforce.

The increase, which follows the accepted formula from the 7th Central Pay Commission recommendations, is set to become effective from January 1, 2026. It reflects the government's ongoing effort to align salaries and pensions with living costs.