New Delhi: The Union Cabinet has approved a 3 percent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, effective from October 1, 2025. The decision aims to protect employees and pensioners from rising inflation and maintain their purchasing power. The hike will be added to the existing DA rate of 55 percent of basic pay or pension.
Approximately 49.19 lakh central government employees and 68.72 lakh pensioners are set to benefit from this move. The increase follows the formula recommended by the 7th Central Pay Commission, which links DA adjustments to the Consumer Price Index for Industrial Workers (CPI-IW).
The total annual financial impact of this DA and DR increase on the government’s budget is estimated at Rs 10,083.96 crore. This expenditure reflects the government’s commitment to ensuring that its workforce and retired employees continue to receive compensation aligned with the cost of living.
Add Zee News as a Preferred Source
Earlier in 2025, the Cabinet had approved a 2 percent DA increase, bringing the rate to 55 percent effective from January 1, 2025. The latest 3 percent hike builds on that adjustment, providing further relief to employees and pensioners amid ongoing inflationary pressures.
The revised DA and DR rates will be applicable from October 1, 2025, and employees and pensioners can expect the updated amounts in their upcoming payments, subject to processing timelines of respective departments.
The government’s decision highlights its commitment to supporting its workforce systematically and transparently. By following the established formula for DA calculation, it ensures fairness while addressing economic realities.
As economic conditions continue to evolve, further adjustments to DA and DR may be considered in future Cabinet meetings. Employees and pensioners are advised to stay updated through official communications for any subsequent changes.
Stay informed on all the , real-time updates, and follow all the important headlines in and on Zee News.