The Union Cabinet on Wednesday increased Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent for about 49.19 lakh central government employees and 68.72 lakh pensioners.
The DA/DR increase of 3 per cent over the existing rate of 55 per cent of the basic pay/pension to compensate against the price rise is effective July 1, 2025.
The combined impact on the exchequer on account of an increase in DA and DR will be Rs 10,083.96 crore per annum, I&B Minister Ashwini Vaishnaw said while briefing on decisions taken in the Cabinet meeting.
The increase is in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission.