Union cabinet approves 3% increase in allowances for employees, pensioners

Dearness allowance, relief raised from 60% to 63%; decision to benefit nearly 1.07 crore people

Kashmir Impulse Desk

New Delhi, Oct 28

The union cabinet on Wednesday approved a 3-percentage-point increase in dearness allowance for central government employees and dearness relief for pensioners, effective July 1, 2026, the government said.

The increase will raise both payments from 60 percent to 63 percent of basic salary and pension, respectively, to help offset the impact of rising prices.

The decision is expected to benefit approximately 48.54 lakh central government employees and 68.71 lakh pensioners.

The combined annual cost to the government is estimated at Rs 107 crore, according to the announcement.

The increase follows the accepted formula based on recommendations of the Seventh Central Pay Commission.

The decision was taken at a cabinet meeting chaired by Prime Minister Narendra Modi.

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