Major decision for Central employees and pensioners, 3 per cent increase against inflation

The Central Government has made an important announcement for government employees and pensioners ahead of the Diwali festivals. Union Minister Ashwini Vaishnaw stated on Wednesday that Dearness Allowance (DA) for central employees and Dearness Relief (DR) for pensioners has been increased by 3 per cent. This increase will come into effect from 1 July, 2026.

According to a report by Hindustan Times, the government's aim with this decision is to provide relief against inflation. Due to this change, DA and DR will now increase from 60 per cent to 63 per cent of the basic pay or pension. This increase is expected to benefit approximately 48 lakh central government employees and 68 lakh pensioners. According to a report by Times of India, a total of more than 1.17 crore beneficiaries will be affected by this decision.

This increase will place an additional annual burden of total ₹ 10,016 crore on the government exchequer. Additionally, rates have also been revised for employees under various scales of the Central Pay Commission. For employees under the 6th Central Pay Commission, DA will increase from 262 per cent to 269 per cent of the basic pay, representing a seven per cent increase. Meanwhile, for employees under the 5th Central Pay Commission, this allowance will increase from 483 per cent to 497 per cent, which is a 14 per cent increase. These revised rates will also apply from 1 July, 2026.

Other important decisions have also been taken by the Central Cabinet. This includes the approval of an allocation of ₹ 7,395 crore for the 'PM Viksit Gram Swaraj Yojana'. In addition, a ₹ 10,000 crore Container Manufacturing Promotion Scheme and a ₹ 1,856 crore 'Khelo India Sports Goods and Manufacturing' scheme have also been included in the Cabinet's list.