New Delhi, April 18: In a significant development, the Central Cabinet, chaired by Prime Minister Narendra Modi, approved a 2% increase in the Dearness Allowance (DA) for central government employees during a meeting on Saturday. This increase will take effect from January 1, 2026, resulting in a boost to employees’ salaries.
The Cabinet also sanctioned additional Dearness Allowance for central employees and Dearness Relief (DR) for pensioners. This increase is 2% higher than the current rate of 58%, aimed at alleviating the impact of inflation.
According to government estimates, the hike in DA and DR will impose an additional annual burden of approximately ₹6,791.24 crore on the national treasury. This decision will benefit around 50.46 lakh central employees and 68.27 lakh pensioners.
The increase is based on the formula established by the recommendations of the 7th Central Pay Commission. While this decision will enhance employees’ salaries, there is also growing demand for significant changes in the pay structure concerning the proposed 8th Pay Commission.
Meanwhile, the National Council-Joint Consultative Machinery (NC-JCM) has submitted a memorandum to the government, requesting an increase in the fitment factor to 3.83. If accepted, the minimum basic salary could rise from ₹18,000 to approximately ₹69,000.
The fitment factor is a multiplier used to determine employees’ salaries, considering inflation and the cost of living.
Additionally, the NC-JCM has proposed an annual salary increase of 6%, two increments upon promotion, and a minimum benefit of ₹10,000.
If these changes are implemented, more than 50 lakh central employees and around 65 lakh pensioners will be directly affected.
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