New Delhi, April 19 -- The Union Cabinet has approved a 2% increase in dearness allowance (DA) for central government employees. This decision, finalised during a Cabinet meeting on Saturday, raises the allowance from the current rate of 58% to 60%. The adjustment serves to address the long-standing wait of the workforce for a revision in their compensation structure. The 2% hike also applies to Dearness Relief (DR) for pensioners, which similarly increases from 58% to 60%. Briefing about the cabinet decisions, information and broadcasting minister Ashwini Vaishnaw said the decision will benefit over five million central government employees and over 6.8 million pensioners. "Another very big decision was taken today. I would like to extend my heartiest congratulations. DA and DR have been increased for all our central government employees and pensioners, which will cost the Government of India a total of Rs.6,791 crore. Basically, DA and DR will become 60% of the basic pay from January 1, 2026. It has been increased by 2%, from 58% to 60%. It will become 60% of the basic pay. There are a total of about five million employees and 6.8 million pensioners of the Government of India. This will be a huge benefit for all of them," he said The Dearness Allowance is a fundamental cost-of-living adjustment designed to support government employees and pensioners. It functions specifically to offset the impact of inflation on fixed incomes. The allowance is calculated as a percentage of the basic pay and undergoes periodic revisions based on established inflation indices to maintain the purchasing power of the workforce. Earlier in October of 2025, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 3% increase in dearness allowance for Central Government employees and Dearness Relief for pensioners, effective from July 1, 2025. The decision raised the then-existing rate from 55% to 58% of the basic pay or pension, according to a release by the Cabinet. The hike, aimed at offsetting the impact of inflation, was sought to benefit approximately 4.9 million central government employees and 6.87 million pensioners. The total financial implication of the decision on the exchequer was estimated at Rs.10,083.96 crore annually. The revision followed the formula based on the recommendations of the 7th Central Pay Commission. The Cabinet has also approved two multi-tracking projects. According to an official release, the 859km Ghaziabad - Sitapur 3rd and 4th Line will be built at a cost of Rs.14,926 crore, while the 458km Rajahmundry (Nidadavolu) - Visakhapatnam (Duvvada) 3rd and 4th Line will be built at a cost of Rs.9,889 crore....