New Delhi: The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved a significant increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners.
The increase is an additional installment of 3% over the existing rate of 55%, bringing the total DA/DR to 58% of the Basic Pay/Pension, said Shri Ashwini Vaishnaw, Minister Information and Broadcasting after the Cabinet Meeting was over.
This hike is effective from July 1, 2025, and is aimed at compensating the beneficiaries against the recent rise in prices (inflation).
- Beneficiaries: The decision will directly benefit approximately 49.19 lakh Central Government employees and 68.72 lakh pensioners.
- Financial Cost: The combined annual burden on the exchequer due to this 3% increase in both DA and DR is estimated to be Rs. 10,083.96 crore.
The increase adheres to the accepted formula for DA/DR calculation, which is based on the recommendations of the 7th Central Pay Commission.