Unions Cabinet agrees to 3 percent DA-DR increase

1. Basic Approval & Details

• Authorized by: Union Cabinet, under Prime Minister Narendra Modi.
• Perquisite: Extra instalment of Dearness Allowance (DA) and Dearness Relief (DR).
• Purpose: To buy back the employees of the central government and pensioners to cover the price increase (inflation).

2. Effective Date & Rate

• Effective From: 1st July 2025.
• Increase: 3 percent, as compared to the current rate.
• The New Rate: 58 percent of Basic Pay/Pension (up to 55 percent).

3. Beneficiaries

• Central Government Employees: 49.19 lakh or so.
• Pensioners: 68.72 lakh.

4. Financial Impact

• The cumulative effect to the exchequer is approximated to be Rs. 10083.96 crore/annum.

5. Basis for the Hike

• This growth is in accordance with the known formula according to the conclusion of the 7th Central Pay Commission.