New Delhi (Rajeev Sharma): The Union Cabinet on Wednesday approved a 3 per cent increase in Dearness Allowance (DA) and Dearness Relief (DR) for 49.19 lakh Central Government employees and 68.72 lakh pensioners. The hike, effective from July 1, 2025, raises the current rate to 58 per cent of basic pay or pension.
According to Information and Broadcasting Minister Ashwini Vaishnaw, the decision will put an additional annual burden of ₹10,083.96 crore on the exchequer. He said the step aims to offset the impact of rising prices and provide relief to both serving employees and pensioners.
The announcement follows the recent rationalisation of GST rates, which made mass consumption items such as ghee, paneer, butter, namkeen, ketchup, jam, dry fruits, coffee, and ice creams cheaper, along with aspirational goods like televisions, washing machines, and air conditioners.
The hike aligns with the formula recommended by the 7th Central Pay Commission. The government revises DA and DR twice a year, with the previous increase announced in March and implemented from January 1.
Last month, the Cabinet had also approved a performance-linked bonus for railway employees, signaling the Centre’s continued efforts to support its workforce.
