New Delhi (Gurpreet Singh): The Union Cabinet, chaired by Prime Minister Narendra Modi, officially approved a 2 percent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on Saturday, April 18, 2026. This long-awaited decision, effective retrospectively from January 1, 2026, raises the allowance from the existing 58 percent to 60 percent of the basic pay or pension. The move is designed to provide a much-needed financial cushion against inflationary pressures and the rising cost of living, which have been significant concerns for the workforce in recent months.
The revision is expected to benefit approximately 50.46 lakh central government employees and 68.27 lakh pensioners across the country. According to official estimates, the combined annual financial implication for the exchequer will be approximately ₹6,791.24 crore. This increase follows the standard formula established by the 7th Central Pay Commission, which utilizes the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW) for the period ending December 2025. With the approval now finalized, beneficiaries will also receive arrears for the first three months of the year in their upcoming salary and pension cycles.
While the 2 percent hike offers immediate relief, it comes at a time of intensifying demands for more comprehensive salary reforms. Employee unions, under the National Council–Joint Consultative Machinery (NC-JCM), have recently submitted a memorandum to the government pushing for the implementation of the 8th Pay Commission. Their demands include a significant revision of the fitment factor to 3.83, which would potentially raise the minimum basic pay from the current ₹18,000 to approximately ₹69,000. For now, the focus remains on the disbursement of the revised DA, providing a steady, inflation-linked adjustment as the government continues to evaluate broader pay structure proposals.
