Union cabinet approves 2 PC DA hike for govt employees, pensioners

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved a 2 per cent increase in Dearness Allowance (DA) for central government employees, effective from January 1, 2026, thereby increasing their take‑home pay.

The Cabinet okayed the release of an additional instalment of DA to central government employees and Dearness Relief (DR) to pensioners, representing



an increase of 2 per cent over the existing rate of 58 per cent of basic pay/pension, to compensate for the price rise.

“The combined impact on the exchequer on account of an increase in both Dearness Allowance and Dearness Relief would be Rs 6,791.24 crore per annum. This will benefit about 50.46 lakh Central Government employees and 68.27 lakh pensioners,” said an official statement.