Cabinet approves 3% hike of Dearness Allowance for central government employees

Union Minister Ashwini Vaishnaw announced a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, effective from July 1, following approval from the Union Cabinet.

​The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday, approved the release of an additional instalment of DA to Central Government employees and DR to pensioners from July 1, 2025, representing an increase of 3% over the existing rate of 55% of the Basic Pay/Pension, to compensate against the price rise.

​The combined impact on the exchequer on account of an increase in both Dearness Allowance and Dearness Relief would be ₹10,083.96 crore per annum. This will benefit about 49.19 lakh central government employees and 68.72 lakh pensioners.

​This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.