7th Pay Commission: DA rises to 63%, over 1.17 crore employees and pensioners to benefit

The Union Cabinet has approved a 3 percentage-point increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, providing additional income to more than 1.17 crore people across India. The decision, announced on Wednesday, October 28, raises the DA and DR rates from 60 per cent to 63 per cent of basic salary and pension. The revised rates will take effect retrospectively from July 1, 2026.

Union Information and Broadcasting Minister Ashwini Vaishnaw announced the decision following a Cabinet meeting chaired by Prime Minister Narendra Modi. According to the government, the increase will benefit approximately 48.54 lakh central government employees and 68.71 lakh pensioners. The announcement comes ahead of Diwali and means eligible employees and pensioners will receive additional payments for the months since July.

What is the new DA and DR rate?

The Cabinet has increased Dearness Allowance and Dearness Relief by three percentage points, taking the existing rate from 60 per cent to 63 per cent.

DA forms part of the salary paid to government employees to help offset rising living costs. DR provides similar relief to pensioners.

The government periodically revises these rates using inflation data, particularly the All-India Consumer Price Index for Industrial Workers.

The previous revision, effective January 1, 2026, increased DA and DR from 58 per cent to 60 per cent.

How much will central government employees earn after the DA hike?

The additional amount depends on an employee’s basic salary.

For someone receiving ₹18,000 in basic monthly pay, the increase works out to ₹540 per month.

These figures represent the additional DA amount before any applicable deductions. They do not include changes to other salary components.

Will employees and pensioners receive arrears?

Yes. The revised rates apply from July 1, 2026, making eligible employees and pensioners entitled to arrears for the period before the increase appears in their regular payments.

For example, an employee with ₹35,400 in basic pay would receive an additional ₹1,062 per month.

For the July-to-October period, this would amount to ₹4,248 in additional DA, assuming the same basic pay throughout.

Pensioners will receive a corresponding increase calculated on their eligible basic pension.

What happens next?

The government will issue the necessary implementation orders following the Cabinet’s approval.

The increase comes as employees await developments concerning the Eighth Central Pay Commission, which will examine future salary and pension structures.