Information and Broadcasting Minister Ashwini Vaishnaw announced the decision after the meeting, which Prime Minister Narendra Modi chaired. Pensioners will receive a matching increase in dearness relief. The revised rates apply from July 1, 2026.

Delhi: Union Minister Ashwini Vaishnaw says, “The fourth decision is a Diwali gift from Prime Minister Narendra Modi to all central government employees and pensioners. Dearness Allowance (DA) and Dearness Relief (DR) have been increased by 3%, effective July 1, 2026. With this increase, the DA and DR rate will rise from 60% to 63%. Details regarding the 6th and 5th Central Pay Commission scales will be provided in the press note. The increase will have an additional financial implication of approximately ₹10,000 crore for the government and benefit 48 lakh central government employees and 68 lakh pensioners.”— IANS (@ians_india) October 28, 2026

About 48.54 lakh employees and 68.71 lakh pensioners will benefit. The change will cost the government about ₹10,000 crore.

The increase follows a 2% hike the Cabinet approved in April. The government usually revises the allowance twice a year, in January and July, to offset inflation.

The amount each person receives depends on basic pay or pension. An employee with a basic pay of ₹50,000 a month, for example, would get ₹1,500 more a month. Because the rates apply from July 1, eligible beneficiaries may also receive arrears for the months before payment begins.

Other Cabinet decisions

The Cabinet approved three other measures Wednesday:

• A container manufacturing promotion scheme, with ₹10,000 crore allocated.
• The Khelo India Sports Goods Manufacturing Scheme, with ₹1,856 crore.
• The Pradhan Mantri Viksit Gram Swaraj Yojana for village development and local-level planning, with ₹7,395 crore.

The four decisions together carry an outlay of about ₹29,267 crore.