Cabinet Approves 2% DA Hike For Central Govt Employees: How Much Extra Salary Will You Receive In April?

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR). 

This decision is set to benefit approximately 5 million central government employees and 6.5 million pensioners, effective from January 1, 2026.

The hike follows the established formula based on the recommendations of the 7th Central Pay Commission, which uses the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW). 

With this latest revision, the total DA/DR has risen from 58% to 60% of the basic pay/pension.

The Liabilities

The announcement comes after a period of significant anticipation and mounting pressure from employee unions.

Because of the hike at the start of the year, employees and retirees will receive three months of arrears (January, February, and March) in a lump sum with their April salaries.

For a junior-level employee at Level 1 with a basic pay of Rs 18,000, the 2% increase translates to an additional Rs 360 per month. 

Meanwhile, senior officials at Level 10 could see a monthly gain of roughly Rs 1,122, plus a one-time arrears payment exceeding Rs 3,300.

8th Pay Commission

While the 2% hike addresses immediate inflationary pressures, it arrives at a time of broader agitation.

Representative bodies, including the National Council–Joint Consultative Machinery (NC-JCM), have been intensifying their demands regarding the 8th Pay Commission, which was officially notified in late 2025.

In a memorandum submitted just days ago, the NC-JCM pitched for:

• A higher fitment factor of 3.83, which would raise the minimum basic pay to Rs 69,000.
• An annual increment increase to 6%.
• The full restoration of the Old Pension Scheme (OPS).

The combined impact on the finances of both DA and DR is estimated to be several thousand crores annually.

Government officials stated that the revision is an important tool to address the erosion in the real value of salaries due to price rises.

While some employee federations had hoped for a 3% hike based on specific inflation data points, the 2% figure aligns with the government’s rounding-off policy.

This adjustment is expected to provide a modest boost to urban consumption as the new financial year gets underway.