India hikes DA & DR by 2% for Govt employees and pensioners

NEW DELHI: The long wait of lakhs of employees and pensioners in New Delhi is over, the Finance Ministry has issued an office memorandum formally confirming the decision to increase Dearness Allowance (DA) and Dearness Relief (DR). This move of the government will not only increase the monthly income of the employees but will also ensure that they will be able to get the arrears of the last few months.

As per the order issued by the Department of Expenditure under the Ministry of Finance, the Dearness Allowance has been increased by two percent for central government employees. After this decision, the DA rate has increased from 58 percent of the basic pay to 60 percent. These new rates will be considered effective from January 1, 2026, which means that the employees will get the dues for the months of January, February and March in the form of arrears.

The decision will directly benefit about 50 lakh central government employees and 68 lakh pensioners. While dearness allowance (DA) is given to government employees, dearness relief (DR) is given to pensioners.

The salary increase is determined on the basis of the employee’s ‘pay matrix’ level and basic pay. Employees with a basic pay of Rs 18,000 were earlier getting Rs 10,440 (58%) as DA. At the new rate of 60 per cent, this amount will now increase to Rs 10,800, which is a direct monthly increase of Rs 360. Similarly, for Level-10 officers with a basic pay of Rs 56,100, their monthly pay will see an increase of about Rs 1,122. As this revision will be effective from January, an employee with a basic pay of Rs 18,000 will also get arrears of about Rs 1,080 (spread over a period of three months).

The Government of India reviews the Dearness Allowance (DA) twice a year in January and July based on the data of the All India Consumer Price Index for Industrial Workers (AICPI-IW). The main objective of this exercise is to secure the purchasing power of employees against rising inflation. This two per cent increase was deemed necessary in view of the recent rise in the prices of essential commodities in the last few months.

This decision of the Finance Ministry will put an additional annual burden of crores of rupees on the government exchequer. However, experts believe that the transfer of additional funds into the hands of employees will increase market demand, thereby boosting the country’s economic activities. Ahead of the upcoming festive season and the associated period of rising expenses, this order is being seen as a major relief for employees. Following this official order of the Finance Ministry, the accounts sections of various government departments have now started processing salaries based on the new rates. It is expected that employees will receive both the revised salary and the outstanding amount together in their paychecks for the months of April or May.