DA Hike 2026: Cabinet Approves 3% Increase to 63%

The Union Cabinet on Wednesday approved a hike in dearness allowance (DA) for Central Government Employees and dearness relief (DR) for pensioners, providing an increase of 3 percentage points under the 7th Central Pay Commission (CPC) pay structure. The revision will take effect retrospectively from July 1, 2026.

Following the latest decision, DA for eligible central government employees will increase from 60% to 63% of basic pay. Pensioners covered under the corresponding provisions will also receive an increase in DR from 60% to 63% of their basic pension.

The government has also approved higher increases for employees and pensioners covered under the 6th and 5th Central Pay Commission pay scales. The revised rates differ according to the applicable pay commission structure.

The combined annual financial impact of the DA and DR revision on the government exchequer is estimated at Rs 10,016 crore. According to the announcement, the decision will benefit approximately 48 lakh central government employees and 68 lakh pensioners.

DA Hike 2026: What Has the Cabinet Approved?

The latest decision increases dearness allowance for central government employees and dearness relief for pensioners to help account for changes in the cost of living. The increase is based on the accepted formula following the recommendations of the 7th Central Pay Commission.

For employees and pensioners covered under the 7th CPC pay structure, the DA and DR rates will rise by 3 percentage points, from 60% to 63%, effective July 1, 2026.

The revision also covers beneficiaries under older pay commission structures. Employees and pensioners covered under the 6th CPC will receive a 7 percentage point increase, while those under the 5th CPC will receive a 14 percentage point increase.

These changes mean that the revised rates will vary depending on the pay commission structure applicable to each employee or pensioner.

Revised DA and DR Rates Under the 5th, 6th and 7th Pay Commissions

The Cabinet-approved revision sets different increases for beneficiaries covered under the three pay commission structures. The revised rates, effective July 1, 2026, are as follows:

The percentages are calculated against basic pay or pension under the applicable pay commission structure. The higher percentage figures under the 5th and 6th CPC should therefore be understood within their respective pay structures rather than compared directly with the 7th CPC rates.

How Much Will Central Government Employees Benefit From the DA Hike?

For employees covered under the 7th CPC, the DA rate will increase from 60% to 63% of basic pay. The actual additional amount an employee receives will depend on their basic salary.

For example, an employee with a basic pay of Rs 30,000 would receive DA of Rs 18,000 at the previous rate of 60%. At the revised rate of 63%, the DA amount would rise to Rs 18,900, resulting in an additional Rs 900 per month.

Similarly, an employee with a basic pay of Rs 50,000 would see DA increase from Rs 30,000 to Rs 31,500. This represents an additional Rs 1,500 per month.

These figures illustrate the increase in DA for employees under the 7th CPC pay structure. They do not represent the employee’s total salary, which may include other components and deductions. The calculations also exclude any arrears arising from the revision’s effective date.

How Much Will Pensioners Receive Under the DR Hike?

Pensioners covered under the 7th CPC structure will also benefit from the increase in dearness relief. Their DR rate will rise from 60% to 63% of basic pension, effective July 1, 2026.

The additional amount will depend on the pensioner’s basic pension. For example, a pensioner receiving a basic pension of Rs 25,000 would receive Rs 15,000 as DR at the previous rate of 60%. At 63%, the DR amount would increase to Rs 15,750, adding Rs 750 per month.

The actual benefit will vary according to the basic pension and the applicable rules. The Cabinet announcement covers approximately 68 lakh pensioners, alongside around 48 lakh central government employees.

What Is the Total Financial Impact of the DA and DR Increase?

The government estimates that the combined annual financial impact of the revised DA and DR rates will be Rs 10,016 crore.

The expenditure covers the increase in allowances for eligible central government employees and the corresponding relief for pensioners. The decision affects a combined beneficiary group of approximately 1.16 crore people, based on the figures provided in the announcement.

The financial impact reflects the government’s additional expenditure resulting from the revised rates. Individual benefits will depend on basic pay or pension and the applicable pay commission structure.

How Does the Government Calculate Dearness Allowance?

Dearness allowance is an additional payment provided to eligible government employees to help offset the effects of inflation on their purchasing power. Dearness relief serves a corresponding purpose for pensioners.

The government announces DA revisions twice a year, using inflation data measured through the All India Consumer Price Index (AICPI). The allowance is revised under an established formula, with the latest increase described as being in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission.

The revision is intended to account for changes in consumer prices. Since inflation affects the cost of essential goods and services, changes in DA and DR can influence the effective income available to employees and pensioners.

When Was the Previous DA Hike Announced?

According to the announcement, the previous DA revision was approved by the Union Cabinet on April 18, 2026, when it sanctioned a 2% increase.

The latest decision raises the DA and DR rates by 3 percentage points for beneficiaries covered under the 7th CPC pay structure. The new rates will apply from July 1, 2026.

The twice-yearly revision schedule allows the government to adjust DA and DR in response to inflation data. The exact financial benefit for each individual depends on their basic pay or pension and the pay commission structure applicable to them.

When Will Employees and Pensioners Receive the Increased DA and DR?

The Cabinet has approved the revised rates with effect from July 1, 2026. This establishes the effective date for the increase, although the announcement provided here does not specify the date on which the revised payments will be credited to beneficiaries.

Because the revision takes effect from July 1, the final amount payable to an eligible employee or pensioner may depend on the implementation arrangements and any arrears due under the applicable rules.

Employees and pensioners should refer to the relevant official government orders for detailed payment instructions and implementation provisions.

Key Takeaways

• The Union Cabinet approved a 3 percentage point DA and DR increase for beneficiaries under the 7th CPC, taking the rates from 60% to 63% from July 1, 2026.
• Beneficiaries under the 6th CPC will see rates rise from 262% to 269%, while those under the 5th CPC will see rates increase from 483% to 497%.
• The revision is expected to benefit around 48 lakh central government employees and 68 lakh pensioners.
• The combined annual financial impact of the DA and DR increase is estimated at Rs 10,016 crore.