India raises central employee and pensioner cost-of-living allowance
India’s cabinet approved a three-percentage-point increase in Dearness Allowance for central government employees and Dearness Relief for pensioners on 28 October.
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India’s cabinet approved a three-percentage-point increase in Dearness Allowance for central government employees and Dearness Relief for pensioners on 28 October. The change applies from 1 July 2026 and takes the rate from 60% to 63% of basic pay or pension.
The government estimates an annual fiscal cost of 10,016.10 crore rupees. It said around 48.54 lakh employees and 68.71 lakh pensioners would benefit. The increase follows the accepted formula based on the Seventh Central Pay Commission’s recommendations.
The decision adjusts a specific allowance to compensate for price rises. The three-point increase refers to the allowance rate as a share of basic pay or pension, rather than a 3% increase in every recipient’s entire income. The announcement does not provide a payment-by-payment disbursement schedule.
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Publication of the official announcement on 28 October 2026.
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India raises central employee and pensioner cost-of-living allowance
India’s cabinet approved a three-percentage-point increase in Dearness Allowance for central government employees and Dearness Relief for pensioners on 28 October. The change applies from 1 July 2026 and takes the rate from 60% to 63% of basic pay or pension.
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