New Delhi, April 19 -- The Union Cabinet on Saturday approved a two-percentage-point increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, raising both to 60% of basic pay and pension, respectively. The decision, taken at a meeting chaired by Prime Minister Narendra Modi, will be effective from January 2026 and is expected to benefit around 12.2 million people, including 5.4 million employees and 6.8 million pensioners. The revision, based on inflation trends, will increase the government's annual expenditure by Rs.6,791.24 crore.

Union information and broadcasting minister Ashwini Vaishnaw said the hike follows the standard formula linked to movements in the Consumer Price Index fo...