The Union Cabinet has approved a 2 per cent increase in Dearness Allowance (DA) for Central government employees, according to sources, reported The Times of Idnia. The move is part of the government's routine revisions aimed at cushioning the impact of inflation on salaries and pensions.
DA revision continues twice-a-year cycle
The Dearness Allowance is revised twice annually, in January and July, as part of a structured compensation system. The last revision took place in October, when DA was raised from 55 per cent to 58 per cent, effective July 1, 2025. The hike was later implemented along with arrears, benefiting both employees and pensioners.
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DA is a cost-of-living adjustment calculated as a percentage of basic pay. It is designed to offset inflation and help maintain purchasing power and living standards.
Relief amid broader pay demands
The latest increase comes at a time when employee unions are pushing for wider changes under the proposed 8th Pay Commission. Among the key demands is a higher fitment factor of 3.83, which could significantly raise the minimum basic pay from Rs 18,000 to around Rs 69,000.
The National Council-Joint Consultative Machinery has also proposed expanding the definition of "family" for pay calculations to include dependent parents. Other suggestions include a cap on pay disparities, higher annual increments, and additional inflation-linked allowances.
Other Cabinet decisions
Alongside the DA hike, the Cabinet is also reported to have cleared a Sovereign Maritime Fund with a corpus of Rs 13,000 crore. The fund aims to provide stable and affordable insurance coverage for Indian-flagged, India-bound, and India-originating vessels.
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In another decision, the government has extended the Pradhan Mantri Gram Sadak Yojana (PMGSY) until 2028. The extension comes with an additional allocation of Rs 3,000 crore to support rural road connectivity.
Together, these decisions reflect ongoing policy measures focused on employee welfare, infrastructure and economic support systems.
