Cabinet approves 3 pc DA and DR hike effective July 1,2026

The Union Cabinet has cleared a 3 per cent hike in Dearness Allowance (DA) for Central Government staff and Dearness Relief (DR) for pensioners, Union Minister Ashwini Vaishnaw said on Wednesday (October 28). The new rates apply from July 1, 2026, and take both allowances from 60% to 63% of basic pay or pension.

Around 48 lakh employees and 68 lakh pensioners are expected to receive the revised payments from July. The change adds Rs 10,016 crore a year to government spending, reported the Hindustan Times.

Dearness Allowance goes to serving employees, while pensioners receive Dearness Relief. The payments are revised to help offset rising living costs for recipients. The latest decision covers staff and retirees under the existing allowance rules, and the revised rates start on July 1.

Separate hike for 5th and 6th Pay Commissions

The Cabinet also cleared separate DA revisions for employees whose salaries are governed by the 5th and 6th Central Pay Commissions. These rates differ from the increase announced for other Central Government employees.

Also Read: Centre hikes DA by 2 pc; delay sparks unions’ push for 8th Pay Commission

For staff under the 6th Pay Commission, DA will move up from 262% to 269% of basic pay, a rise of seven percentage points. Those covered by the 5th Pay Commission will see the rate go from 483% to 497%, an increase of 14 percentage points. The 5th Pay Commission group gets the larger jump.

These revised rates will also take effect from July 1, 2026, the same date as the main hike.

Cabinet clears rural development, manufacturing schemes

The Cabinet announced other decisions at the meeting, including funding for rural development and manufacturing. It approved Rs 7,395 crore for the PM Viksit Gram Swaraj Yojana and cleared a Rs10,000-crore scheme to promote container manufacturing.

Also Read: May salary windfall: TN, Bihar, Odisha greenlight DA hikes; all eyes on Bengal next

The Khelo India Sports Goods and Manufacturing Scheme also received approval, and its allocation is Rs 1,856 crore. These three proposals were among the other decisions the Cabinet announced at the same meeting, alongside the allowance revision.

The DA and DR increase will raise payments to eligible employees and pensioners from July. The government has estimated that the additional annual expenditure on the revised allowances will come to Rs 10,016 crore.