DA Hike Alert! BIG Diwali Gift for 1.16 Crore Employees & Pensioners,Cabinet Hikes Dearness Allowance to 63%

The Union Cabinet on Wednesday approved a 3% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners. Union minister Ashwini Vaishnaw said the hike takes DA and DR from 60% to 63% of basic pay and pension, effective July 1, 2026. The Cabinet also cleared three other proposals worth the total value of Rs. 29,267 crore.

Around 48 lakh central government employees and 68 lakh pensioners will benefit. The combined annual cost to the exchequer is Rs.10,016 crore This is the second hike this year.

The previous revision, approved in April 2026, raised DA and DR by 2% to 60%. The government revises both twice a year, in January and July, to help employees and pensioners deal with inflation. DA is paid to employees who are still working as a percentage of basic pay, while DR is the same for pensioners.

While the 7th Pay Commission is the reference point for the current pay framework, employees and pensioners covered by the older 5th and 6th CPC are also eligible for DA/DR hike.

DA Hike Under 6th Pay Commission

For central government employees and pensioners who are receiving pay or pension under the 6th Central Pay Commission structure, the DA and DR rates have been increased from 262% to 269% an increase of 7 percentage points and is applicable from July 1, 2026.

For instance, an employee getting a basic salary of Rs 20,000 under the 6th CPC structure would see the monthly DA amount increase from Rs 52,400 to Rs 53,800,so an additional Rs 1,400 per month.

5th Pay Commission DA Hike

The Employees and pensioners covered under the 5th Central Pay Commission pay structure will get a larger percentage-point revision.

Under the revised rates, DA and DR have increased from 483% to 497% of basic pay or pension rising by 14-percentage-point rise.

For example, an employee with a basic salary of Rs 10,000 under the 5th CPC structure would receive DA of Rs 49,700 per month, compared with Rs 48,300 earlier so an additional Rs 1,400 per month.

Cabinet's Decisions Across Other Key Schemes

Container Manufacturing Promotion Scheme

The biggest scheme approved was the Container Manufacturing Promotion Scheme. It has an outlay of Rs. 10,000 crore over 13 years, running up to FY 2039-40. The scheme is to build a domestic container industry and cut import dependence. The scheme was first announced in Budget 2026-27.

Khelo India Sports Goods Manufacturing Scheme

For the Khelo India Sports Goods Manufacturing Scheme, an outlay of Rs. 1,856 crore over eight years, from 2026-27 to 2033-34 has been announced.

Pradhan Mantri Viksit Gram Swaraj Yojana

The Cabinet approved the Pradhan Mantri Viksit Gram Swaraj Yojana as a Centrally Sponsored Scheme with a total outlay of Rs. 7,395 crore. The scheme focuses on turning Panchayats into empowered, self-reliant and accountable institutions of local self-government, and runs for five years from 2026-27 to 2030-31.