NEW DELHI
The Union Cabinet, led by Prime Minister Narendra Modi, announced a 2 percent increase in Dearness Allowance (DA) for central government employees.
This pay boost, backdated to January 1, 2026, is designed to help workers and pensioners keep up with the rising cost of living. With this change, the total allowance reaches 60 percent of basic pay.
This decision will put more money into the pockets of roughly 50.46 lakh employees and 68.27 lakh pensioners. The government expects this move to cost the national exchequer about ₹6,791.24 crore annually. While the 2 percent hike follows the standard rules of the 7th Pay Commission, it comes at a time when employees are hoping for much larger changes under the upcoming 8th Pay Commission.
Staff unions are currently pushing for a major overhaul of the entire salary system. A key proposal from the National Council–Joint Consultative Machinery (NC-JCM) suggests a much higher “multiplier” for salaries. If the government accepts these bold demands, the minimum basic pay could jump from ₹18,000 to nearly ₹69,000.
Beyond just basic pay, workers are asking for higher annual raises and better retirement benefits. While today’s 2 percent increase offers immediate relief, the real focus remains on these future negotiations. For millions of government families across India, these decisions are vital for maintaining their standard of living in a changing economy. As price rises continue, all eyes are now on the next major pay restructuring.
