New Delhi | October 1, 2025 — The Union Cabinet on Wednesday approved a 3% hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, effective October 1, 2025. The decision, led by Prime Minister Narendra Modi, will benefit 49.19 lakh central government employees and 68.72 lakh pensioners across the country.
Impact on Exchequer
According to the Press Information Bureau (PIB), the combined financial implication of the DA and DR hike will be ₹10,083.96 crore annually. The move is aimed at offsetting the impact of rising prices on government employees and pensioners.
Current DA Status
With this increase, the DA and DR rates will rise from the existing 55% of Basic Pay/Pension to 58%. The revision follows the standard formula recommended by the 7th Central Pay Commission (CPC).
Earlier, in March 2025, the Cabinet had approved a 2% hike, which raised the DA/DR to 55% from January 1, 2025.
Relief for Employees and Pensioners
The latest revision is expected to provide much-needed relief to employees and pensioners facing inflationary pressures. “This additional instalment has been granted to compensate for price rise,” the official release said.
Beneficiaries at a Glance
- 49.19 lakh Central Government employees
- 68.72 lakh pensioners
Key Takeaways
- DA/DR Hike: 3% (from 55% to 58%)
- Effective Date: October 1, 2025
- Beneficiaries: 1.18 crore (employees + pensioners)
- Annual Cost to Exchequer: ₹10,083.96 crore
- Based On: 7th Central Pay Commission formula
This hike continues the government’s policy of bi-annual DA/DR revisions to provide relief against inflation.