New Delhi, April 27 -- The Finance Ministry last week announced 2% hike in Dearness Allowance (DA) for central government employees and pensioners (including railways and defence personnel), effective from 1 January 2026. This effectively increases DA component in basic pay from 58% to 60%.

DA or dearness relief (DR) is a percentage of employees' basic salary specifically meant to help with increased cost-of-living. Increased DA gives higher take-home pay for employees, offering some relief as higher daily expenses impact households.

Typically revised every six months by the All-India Consumer Price Index (AICPI), the allowance is designed to reflect inflation fluctuations. New announcements generally occur in early March and October, w...