Cabinet Approves 2% DA Hike Effective from January 2026 for Central Government Employees and Pensioners 

Cabinet Approves 2% DA Hike Effective from January 2026 for Central Government Employees and Pensioners.  In a much-anticipated move, the Union Cabinet, chaired by Prime Minister Narendra Modi, has officially cleared a 2% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners.

This revision brings the total DA/DR rate to 60%, up from the previous 58%.

Key Highlights of the Announcement:

• Effective Date: The revised rate is effective retrospectively from January 1, 2026.
• Arrears: Employees and pensioners will be entitled to arrears for the months of January, February, and March 2026.
• Beneficiaries: The move is set to benefit over 50 lakh employees and 68 lakh pensioners, providing relief against the rising cost of living and inflation.

The 8th Pay Commission Backdrop

This announcement comes at a critical juncture. The 8th Pay Commission was formally constituted in late 2025, and employee unions under the NC-JCM have been mounting significant pressure for sweeping changes. Demands currently on the table include a higher fitment factor, a revised minimum pay of ₹69,000, and the restoration of the Old Pension Scheme (OPS).

While the 2% hike follows the standard formula based on the AICPI-IW (All India Consumer Price Index for Industrial Workers) data for the period ending December 2025, many unions view this as a temporary measure while they await the broader recommendations of the 8th CPC.

Official Release

Ministry of Finance

Cabinet approves additional instalment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2026

Posted On: 18 APR 2026 3:14PM by PIB Delhi

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2026 representing an increase of 2% over the existing rate of 58% of the Basic Pay/Pension, to compensate against price rise.

The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be Rs.6791.24 crore per annum. This will benefit about 50.46 lakh Central Government employees and 68.27 lakh pensioners.

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

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