Central government employees and pensioners are closely watching for the formal announcement of the second Dearness Allowance (DA) and Dearness Relief (DR) revision of 2026.
Following the previous hike effective January 2026, the current DA stands at 60%. Based on the 12-month average of the All-India Consumer Price Index for Industrial Workers (AICPI-IW), a 3% hike is on the cards, which will push the allowance to 63%.
Once approved by the Union Cabinet, the revision will take effect retrospectively from July 1, 2026.
Why a 3% Increase Is Expected
The Central Government calculates DA revisions for serving personnel and DR for pensioners using the 7th Central Pay Commission formula, pegged to the retail inflation figures compiled monthly by the Labour Bureau.
The 12-month average of the AICPI-IW data from July 2025 to June 2026 yields an increase marginally above 3.0%.
Under standard calculation rules, fractional percentages are rounded down to the nearest whole integer.
This locks the projected increase at 3%, taking the total DA rate from 60% to 63% of Basic Pay.
Projected Salary Impact (Calculation Table)
Dearness Allowance is calculated directly on the minimum or current Basic Pay of an employee. Here is how a 3% increase alters monthly gross pay across different pay levels:
| Pay Level / Basic Pay | Current DA at 60% | Revised DA at 63% | Monthly Gross Increase |
|---|---|---|---|
| Entry Level (₹18,000) | ₹10,800 | ₹11,340 | ₹540 |
| Mid Level (₹31,000) | ₹18,600 | ₹19,530 | ₹930 |
| Senior Level (₹56,100) | ₹33,660 | ₹35,343 | ₹1,683 |
Relief for Pensioners: Central government pensioners will receive an identical 3% boost in their Dearness Relief (DR), resulting in a matching increase in basic monthly pensions.
Arrears and Announcement Timeline
The Union Cabinet typically clears the July DA hike ahead of the festive season in autumn. Following Cabinet approval, the Department of Expenditure under the Ministry of Finance issues the official office memorandum detailing the disbursement.
Because the revision takes effect retrospectively from July 1, employees and pensioners will receive three months of arrears (July, August, and September) alongside their revised pay in the upcoming billing cycle.
The impending hike will benefit roughly 5 million active central government employees and over 6.5 million pensioners across the country.