The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the release of an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from July 1, 2025. The move represents a 3% increase over the existing rate of 55% of Basic Pay/Pension, aimed at offsetting the impact of rising prices.
The hike is expected to benefit nearly 49.19 lakh Central Government employees and 68.72 lakh pensioners across the country. The combined financial burden on the exchequer from this increase in DA and DR is estimated at ₹10,083.96 crore annually.
The decision follows the accepted formula for calculating Dearness Allowance, which is based on the recommendations of the 7th Central Pay Commission.