The Union government announced a 3 percent increase in Dearness Allowance (DA) for central government workers and Dearness Relief (DR) for pensioners ahead of Diwali. Many millions of beneficiaries will benefit as they prepare for the festive season and their household expenses.
The Union Cabinet approved the revision on October 28, 2026. The new allowance will be effective from July 1, 2026, and eligible employees and pensioners will be ensured a benefit of the increase for the relevant period.
More Than 1 Crore Employees and Pensioners to Benefit
The latest DA and DR revision is expected to benefit 48 lakh central government employees and 68 lakh pensioners. In total, the number of beneficiaries is estimated to be around 1.16 crore.
The government forecasts that the cost of the increase will be about ₹10,016 crore annually. It is to help the beneficiaries absorb inflation as well as the higher cost of everyday essentials.
Dearness Allowance is paid to serving government employees to help compensate for changes in living costs. Dearness Relief provides similar financial support to retired government employees who receive pensions.
These allowances are generally revised twice a year and adjustments are linked to changes in the Consumer Price Index for Industrial Workers. These adjustments allow the government to adjust employee compensation and pension benefits to inflation.
DA Rate Increases to 63%
The DA rate for eligible central government employees rises from 60% to 63% of basic pay. Pensioners also receive the corresponding Dearness Relief, subject to the rules.
Delhi: Union Minister Ashwini Vaishnaw says, "The fourth decision is a Diwali gift from Prime Minister Narendra Modi to all central government employees and pensioners. Dearness Allowance (DA) and Dearness Relief (DR) have been increased by 3%, effective July 1, 2026. With this increase, the DA and DR rate will rise from 60% to 63%. Details regarding the 6th and 5th Central Pay Commission scales will be provided in the press note. The increase will have an additional financial implication of approximately ₹10,000 crore for the government and benefit 48 lakh central government employees and 68 lakh pensioners."
— IANS (@ians_india) October 28, 2026
The additional salary received by employees will depend on their basic salary. An employee with a basic salary of ₹18,000 will receive an additional ₹540 per month through DA. This increases DA from ₹10,800 to ₹11,340.
An employee with a basic salary of ₹35,400 will receive an extra ₹1,062 per month. These figures are for Dearness Allowance only and not other salary components, allowances, and deductions.
For pensioners, the additional Dearness Relief will depend on their eligible basic pension. The actual benefit will therefore vary from one beneficiary to another.
Festive Relief Ahead of Diwali
The decision came as Diwali approaches and households are struggling through more than a week of shopping, traveling, gifts, food, and celebrations. It will be a relief; the extra allowance is expected to make some money available for the employees and pensioners in the monthly payments.
Due to the new rate going into effect on July 1, 2026, eligible beneficiaries would also receive arrears for the period. The exact payment schedule will depend on the government orders and disbursements.
The increase is especially significant for pensioners who rely on their monthly pension to meet regular household expenses. More Dearness Relief can help them manage rising prices and festive spending.
Overall, the 3-percentage-point DA and DR increase provides further financial support to central government employees and pensioners. The DA rate is 63%, and therefore the decision is a timely relief ahead of Diwali and will assist the beneficiaries to cope with inflation.
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