DA, DR Hiked by 3% for Central Government Employees and Pensioners from July 1, 2025

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 3% hike in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective July 1, 2025. With this revision, DA/DR will rise from 55% to 58% of Basic Pay/Pension to offset price rise under the 7th Central Pay Commission (7th CPC) formula.

According to the government, the decision will benefit about 49.19 lakh Central Government employees and 68.72 lakh pensioners. The combined financial impact on the exchequer is estimated at ₹10,083.96 crore per annum.

DA and DR are biannual cost-of-living adjustments linked to inflation indices. The latest increase follows the accepted 7th CPC methodology, ensuring continuity and parity between serving employees and pensioners.

Source: PIB