Cabinet Clears 3% Hike in Dearness Allowance for Central Government Employees, Pensioners

• Oct 01 , 2025

New Delhi | October 1, 2025

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 3 per cent increase in Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for pensioners. The decision, aimed at offsetting the impact of rising prices, will come into effect from October 1, 2025, according to an official release from the Press Information Bureau (PIB).

With this revision, the DA and DR will now stand at 58 per cent of basic pay and pension, up from the current level of 55 per cent. The hike will directly benefit 49.19 lakh serving employees and 68.72 lakh pensioners, making the total number of beneficiaries close to 117.91 lakh individuals.

Financial Impact on Exchequer

The combined financial burden on the government due to this increase is estimated at ₹10,083.96 crore per annum. Officials noted that this additional expenditure was necessary to ensure that employees...