Centre hikes DA/DR by 3 per cent; to benefit 1.18 crore employees, pensioners

The Union Cabinet on Wednesday increased Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent for about 49.19 lakh Central Government employees and 68.72 lakh pensioners.

The DA/DR increase of 3 per cent over the existing rate of 55 per cent of the basic pay/pension to compensate against the price rise is effective July 1, 2025.

The combined impact on the exchequer on account of an increase in DA and DR will be Rs 10,083.96 crore per annum, I&B Minister Ashwini Vaishnaw said while briefing on decisions taken in the Cabinet meeting.

The hike in DA and DR comes days after rationalisation of GST rates, bringing down prices of mass consumption items like ghee, paneer, butter, ‘namkeen’, ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC, washing machines will become cheaper.

The increase is in accordance with the accepted formula based on the recommendations of the 7^th Central Pay Commission.

The Centre revises DA/DR twice a year. The last revision, announced in March, was effective from January 1.

The Union Cabinet last month had approved a performance-linked bonus for railway employees.