Cabinet Approves 3% Dearness Allowance Increase for Central Government Employees

The announcement centres on dearness allowance, or DA, for central government employees, alongside dearness relief, or DR, for pensioners. India News reported that both rates will rise from 60% to 63% of basic pay and pension respectively.

The increase follows the accepted formula based on the recommendations of the seventh pay commission, according to NDTV India. The supplied coverage does not describe any change to that formula.

On October 28, 2026, Indian Express reported that the Cabinet had cleared a 3% increase in dearness allowance for central government employees.

The announcement also covered pensioners. Business Line - Home reported that 48.54 lakh serving employees and 68.71 lakh pensioners would benefit, with revised rates applying retrospectively from July.

India News gave the effective date as July 1, 2026, and attributed the announcement of the new 63% rates to Vaishnaw. That effective date means the revision applies to a period before the October approval.

The timing brought a festive focus to the coverage. India Today described the Cabinet decision as a Diwali bonanza for central government employees.

The Cabinet has approved the increase. For employees, DA will stand at 63% of basic pay; for pensioners, DR will stand at 63% of pension, according to India News. The three percentage point rise is an increase in those allowance rates, not a stated 3% increase in total pay or pension.

The supplied reports establish the retrospective effective date and the number of beneficiaries. They do not specify when revised payments or any amounts due for the earlier period will be paid.

The remaining practical question is payment timing. Employees and pensioners have an effective date of July 1, but the supplied coverage gives no disbursement schedule for the higher rates or the retrospective amounts.