Centre Hikes Dearness Allowance by 3% for Government Employees and Pensioners
Over 1.18 crore beneficiaries to gain as DA/DR rises to 58%, effective from July 1; ₹10,083 crore annual impact on exchequer.
New Delhi: In a major relief for central government employees and pensioners, the Union Cabinet on Wednesday approved a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR). This move will benefit 49.19 lakh employees and 68.72 lakh pensioners, bringing the total DA/DR to 58% of basic pay/pension.
The revised rates are effective from July 1, 2025, and are aimed at offsetting the impact of inflation on government staff and retirees.
“The combined financial implication on the government due to this hike is ₹10,083.96 crore per annum,” said Information and Broadcasting Minister Ashwini Vaishnaw, while announcing the Cabinet decision.
The hike is in line with the formula recommended by the 7th Central Pay Commission, which links DA/DR revisions to the Consumer Price Index to adjust for inflation.
This is the second DA hike in the calendar year, following the previous 4% increase in January 2025. DA and DR are typically revised twice a year, in January and July.
The announcement is seen as a welcome move ahead of the festive season, and comes at a time when the government is also gearing up for key state elections later this year.
