Home / Business and Economy / Cabinet Approves 3% Hike in Dearness Allowance for Central Govt Employees
Cabinet Approves 3% Hike in Dearness Allowance for Central Govt Employees
3 Oct
Summary
- Dearness allowance and relief increased by 3% for central govt employees and pensioners
- 8th Pay Commission to be implemented from January 1, 2026
- 7th Pay Commission remains in effect until 2026
On October 4, 2025, the Union Cabinet approved a 3% increase in the dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners, respectively. The hike will be effective from July 1, 2025, bringing the total DA and DR to 58% of the basic pay/pension, up from the existing 55%.
The decision was made to compensate for the rising prices and cost of living. The Cabinet also approved the constitution of the 8th Pay Commission, which will come into effect on January 1, 2026. The 8th Pay Commission will review and recommend changes to the pay scales, allowances, and benefits for central government employees.
The current 7th Pay Commission, implemented in 2016, will remain in effect until the 8th Pay Commission takes over in 2026. The new commission panel will comprise a chairperson and at least two members, as is the norm for the Central Pay Commissions established once every ten years.
