3% Cabinet Approves 3% Dearness Allowance Hike Effective July 2026
Cabinet Approves 3% DA Hike for Central Government Employees and Pensioners
The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from 1 July 2026.
Download Centre Announces 3% DA and DR Hike in PDF
The latest decision represents a 3% increase over the existing rate of 60% of Basic Pay/Pension, raising the DA and DR rate to 63%. The increase aims to provide relief to employees and pensioners against rising prices and inflation.
According to the Ministry of Finance, the combined annual financial impact of this increase on the government exchequer will be approximately ₹10,016.10 crore.
The decision is expected to benefit around 48.54 lakh Central Government employees and 68.71 lakh pensioners across the country.
The increase follows the accepted formula based on the recommendations of the 7th Central Pay Commission. As the revised rates are effective from 1 July 2026, eligible employees and pensioners will receive the enhanced benefits accordingly.
This decision provides financial relief to millions of Central Government employees and pensioners by helping them cope with the rising cost of living.
Source: Ministry of Finance, Government of India — Press Information Bureau (PIB), dated 28 October 2026.