Centre Approves 2% DA Hike to 60% Ahead of 8th Pay Commission

The Union Cabinet has approved a 2% hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, increasing the total DA to 60% of basic pay.

This revision will be applicable from January 1, 2026, and is expected to benefit over 1.18 crore individuals, including both employees and pensioners. The total financial impact on the government is estimated at ₹6,791 crore annually.

Dearness Allowance is a key component of government salaries, designed to offset inflation. It is revised twice a year based on the Consumer Price Index (CPI).

The latest increase follows the previous hike in October 2025, when DA was raised from 55% to 58%.

Meanwhile, discussions around the 8th Pay Commission are gaining momentum. Employee unions have demanded a higher fitment factor of 3.83, which, if approved, could significantly increase the minimum basic salary from ₹18,000 to nearly ₹69,000.

For pensioners, this development is equally important. Since pensions are directly linked to last drawn basic pay, any future increase in basic pay will automatically raise pension amounts as well.

Additionally, once the 8th Pay Commission is implemented, the current DA structure is expected to be merged into basic pay, resetting DA to zero before new calculations begin.