Union Cabinet has approved an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from 1st July 2025. The increase of 3% over the existing rate of 55% of basic pay/pension is aimed at compensating for price rise and inflation.
The revision will benefit approximately 49.19 lakh Central Government employees and 68.72 lakh pensioners across India.
The additional DA/DR will be released according to the accepted formula based on the 7th Central Pay Commission recommendations. The combined impact on the exchequer is estimated at ₹10,083.96 crore per annum.
The increase is effective from 1st July 2025, with payments to be adjusted in upcoming salary and pension disbursements.
The revision applies to all Central Government offices and pension disbursing authorities across India.
The step ensures that government employees and pensioners maintain purchasing power in the face of rising prices, supporting household budgets and overall economic stability.
The additional DA and DR will be calculated automatically on the basic pay/pension of employees and pensioners, and disbursed through regular payroll and pension channels.
