The central government has approved a 2% increase in Dearness Allowance (DA) for its employees and pensioners, raising the rate from 58% to 60% of basic pay. The revised allowance will be effective from January 1, 2026, with beneficiaries set to receive arrears for the intervening months.

The hike is expected to provide modest financial relief to government employees amid rising living costs. For instance, employees earning a basic salary of ₹18,000 could see their total pay increase to approximately ₹28,800, while those with a basic pay of ₹29,200 may earn around ₹46,720. Senior officials drawing a basic salary of ₹2.5 lakh could see their overall pay exceed ₹4 lakh following the revision.

Dearness Allowance, which is revised twice annually—in January and July—is designed to offset the impact of inflation on government salaries. Typically, announcements are made around major festivals such as Holi or Diwali. However, this year’s delay in notification had triggered dissatisfaction among employee groups, especially since the previous revision in 2025 was announced on March 28.

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The latest increase comes at a time when employee unions are intensifying their demands for a broader restructuring of pay under the proposed 8th Pay Commission. The revision of DA is often seen as an interim measure, while larger structural changes are considered through periodic pay commissions.

In a memorandum submitted to the government, the National Council-Joint Consultative Machinery has called for a significant overhaul of salary structures. Among its key demands are raising the minimum basic pay from ₹18,000 to ₹69,000 and implementing a fitment factor of 3.83, which would substantially increase overall compensation for central government employees.

The union has also proposed additional reforms, including a 6% annual increment, a minimum 30% slab for House Rent Allowance (HRA), restoration of the old pension scheme, and improved benefits tied to promotions and gratuity calculations. The government has yet to respond formally to these proposals, but the outcome is expected to have far-reaching implications for millions of employees and pensioners across the country.

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