On 01 OCT 2025, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the release of an additional 3% instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, effective 01.07.2025. This increase over the existing rate of 55% of the Basic Pay/Pension is intended to compensate for price rises. The combined impact on the exchequer is estimated at Rs.10083.96 crore per annum, benefiting approximately 49.19 lakh Central Government employees and 68.72 lakh pensioners. This increase aligns with the accepted formula based on the recommendations of the 7th Central Pay Commission. (Release ID: 2173541).
Key Entities Referenced
Dearness Allowance: Allowance to Central Government employees to compensate for price rise.
Dearness Relief: Relief to pensioners to compensate for price rise.
7th Central Pay Commission: Commission whose recommendations are used to determine the increase in Dearness Allowance and Dearness Relief.
Cabinet
Cabinet approves additional instalment of three per
cent Dearness Allowance to Central Government
employees and Dearness Relief to Pensioners
Posted On: 01 OCT 2025 3:06PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today has approved to release an
additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief
(DR) to pensioners w.e.f 01.07.2025 representing an increase of 3% over the existing rate of 55% of the
Basic Pay/Pension, to compensate against price rise.
The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness
Relief would be Rs.10083.96 crore per annum. This will benefit about 49.19 lakh Central Government
employees and 68.72 lakh pensioners.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th
Central Pay Commission.
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MJPS/SKS
(Release ID: 2173541)