The Union Cabinet has approved a 3-percentage-point increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners. The revision raises the rates from 60% to 63% of basic pay and pension, respectively, and will take effect retrospectively from July 1, 2026.
The decision carries an estimated annual financial impact of ₹10,016 crore and is expected to benefit around 48 lakh government employees and 68 lakh pensioners. The increase follows the established formula based on the recommendations of the 7th Central Pay Commission (CPC), providing additional financial support amid rising living costs.
DA and DR Revised for 5th, 6th and 7th CPC Employees
Alongside the latest revision for employees covered under the 7th CPC pay structure, changes have also been made to DA and DR rates for those following the 5th and 6th CPC scales.
For employees and pensioners under the 6th CPC pay scales, the rates have increased by 7 percentage points, from 262% to 269% of basic pay and pension. The revised rate applies from July 1, 2026.
For those covered by the 5th CPC pay scales, DA and DR have risen by 14 percentage points, moving from 483% to 497% from the same date.
Eligible employees and pensioners will receive the revised allowance according to the applicable government orders. The final amount payable will depend on their basic pay or pension and the period covered by the revision.
CPSE Employees’ IDA Rates Revised From October 1, 2026
The Department of Public Enterprises (DPE), under the Ministry of Finance, has also revised Industrial Dearness Allowance (IDA) rates for executives and non-unionised supervisors working in Central Public Sector Enterprises (CPSEs).
An office memorandum dated October 27, 2026, confirms that the revised IDA rates took effect on October 1, 2026. The applicable percentage depends on the pay scale followed by the employee.
The revised rates are as follows:
- 1997 pay scale: 489.5%
- 2007 pay scale: 249.2%
- 2017 pay scale: 59.1%
These rates apply to executives holding board-level and below-board-level positions, as well as non-unionised supervisors covered by the specified CPSE pay scales.
IDA Amount for Employees Under the 1987 Pay Scale
The DPE memorandum separately specifies the IDA payable to eligible employees following the 1987 pay scale under the old system of neutralisation.
The stated amount is ₹18,728, calculated with reference to an increase of 215 points and an average All-India Consumer Price Index (AICPI) of 10,069. Unlike the rates applicable to the 1997, 2007 and 2017 pay scales, this amount is expressed as a fixed figure under the specified calculation method.
Employees should confirm their applicable pay scale and allowance with their respective CPSE’s payroll department to establish the amount payable from October 1, 2026.
Disclaimer: This article is intended for general informational purposes only and should not be treated as an official government notification or financial advice. Employees and pensioners should consult the relevant government orders and their respective payroll or pension departments to confirm eligibility, revised rates, arrears and payment schedules.