Cabinet increases DA to 60% for government staffers

E-PaperSubscribeSubscribeEnjoy unlimited accessSubscribe Now! Get features like The Union Cabinet on Saturday approved a two-percentage-point increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, raising both to 60% of basic pay and pension, respectively. The decision, taken at a meeting chaired by Prime Minister Narendra Modi, will be effective from January 2026 and is expected to benefit around 12.2 million people, including 5.4 million employees and 6.8 million pensioners. The revision, based on inflation trends, will increase the government’s annual expenditure by ₹6,791.24 crore. The Union government revises DA and DR twice a year — in January and July — to offset the impact of rising prices (HT file/ representative photo)chartUnion information and broadcasting minister Ashwini Vaishnaw said the hike follows the standard formula linked to movements in the Consumer Price Index for Industrial Workers (CPI-IW), the benchmark used to adjust salaries and pensions for inflation. The DA and DR were previously set at 58% of basic pay. The Union government revises DA and DR twice a year — in January and July — to offset the impact of rising prices. Dearness allowance applies to serving employees, while dearness relief is paid to pensioners. Any increase in DA directly boosts take-home pay and provides a cushion against inflation. “This increase is in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission,” an official statement said. The revision comes with a slight delay, as such hikes are typically announced by March. The government has also initiated reviews and other processes for the 8th Pay Commission, which will recommend the next revision of salaries, pensions and allowances. The deadline to submit suggestions is April 30. The commission, constituted in November 2025, has been given 18 months to finalise its recommendations. The 7th Pay Commission, implemented in 2016, had fixed the minimum basic pay at ₹18,000 per month and the maximum at ₹2.5 lakh. The 8th Pay Commission will revise these pay scales based on a so-called fitment factor, which is essentially a numerical multiplier-based formula The DA hike comes at a time of concerns around wages. Recent weeks have seen labour unrest in private industrial hubs in Noida and Gurugram over pay and working conditions, underscoring broader anxieties in the labour market even as the government moves to cushion its workforce. Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.