Cabinet Decision / Cabinet Approves 2% Hike in DA of Central Govt Employees
·3 hours ago·2 min read
Key Points
The revised DA will be effective from January 1, 2026, and is expected to put additional disposable income in the hands of government staff, thereby boosting consumption.
New Delhi, Apr 18: In a significant move aimed at providing relief to government employees amid rising inflation, the Union Cabinet has approved a 2% hike in Dearness Allowance (DA) for central government employees.
The decision, taken during a Cabinet meeting chaired by the Prime Minister, will benefit millions of employees and pensioners across the country.
The revised DA will be effective from January 1, 2026, and is expected to put additional disposable income in the hands of government staff, thereby boosting consumption.
The Cabinet also approved the creation of 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 vessels, as well as ships operating to and from India.
In addition, the Cabinet cleared the extension of the Prime Minister Gram Sadak Yojana (PMGSY) till 2028, with an additional allocation of Rs 3,000 crore.
Dearness Allowance, which is linked to the Consumer Price Index, is revised periodically to offset the impact of inflation on employees’ salaries. With this latest increase, the DA component of salaries will rise from the existing level, ensuring better financial support for employees and pensioners.
Officials estimate that the hike will cost the exchequer several thousand crores annually, but emphasized that it is a necessary step to safeguard the welfare of government staff in the face of rising living costs. The move is also seen as a morale booster for employees, especially at a time when inflationary pressures have been affecting household budgets.
The announcement has been welcomed by employee unions, who had been pressing for a revision in DA to match the inflationary trends. Pensioners too will benefit from the hike, as their monthly payouts are directly linked to DA revisions.
The decision, taken during a Cabinet meeting chaired by the Prime Minister, will benefit millions of employees and pensioners across the country.
The revised DA will be effective from January 1, 2026, and is expected to put additional disposable income in the hands of government staff, thereby boosting consumption.
The Cabinet also approved the creation of 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 vessels, as well as ships operating to and from India.
In addition, the Cabinet cleared the extension of the Prime Minister Gram Sadak Yojana (PMGSY) till 2028, with an additional allocation of Rs 3,000 crore.
Dearness Allowance, which is linked to the Consumer Price Index, is revised periodically to offset the impact of inflation on employees’ salaries. With this latest increase, the DA component of salaries will rise from the existing level, ensuring better financial support for employees and pensioners.
Officials estimate that the hike will cost the exchequer several thousand crores annually, but emphasized that it is a necessary step to safeguard the welfare of government staff in the face of rising living costs. The move is also seen as a morale booster for employees, especially at a time when inflationary pressures have been affecting household budgets.
The announcement has been welcomed by employee unions, who had been pressing for a revision in DA to match the inflationary trends. Pensioners too will benefit from the hike, as their monthly payouts are directly linked to DA revisions.
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