New Delhi, Oct 1: The Union Cabinet on Wednesday approved a three per cent increase in Dearness Allowance and Dearness Relief for Central Government employees. This is the second hike this year.

The hike represents a 3% increase over the existing rate of 55% of Basic Pay/Pension, aimed at offsetting the impact of rising prices.

The hike will take effect retrospectively from July 1, 2025. Arrears for July, August, and September will be paid along with the October salary, just before Diwali.

This revision is expected to benefit approximately 49.19 lakh Central Government employees and 68.72 lakh pensioners across the country.

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The DA and DR components are revised periodically to help government employees and pensioners cope with inflation. This latest hike comes as part of the government’s commitment to safeguarding the financial well-being of its workforce and retirees.

Earlier in March. a two per cent increase was announced, taking DA payouts from 53 per cent of basic pay to 55 per cent.