Central Government Employees DA Hike: Union Cabinet Approves 3 Percent Rise for 1.17 Crore Staff and Pensioners

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 3 percent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, with effect from July 1, 2026. The decision was announced after the Cabinet meeting on Wednesday by Information and Broadcasting Minister Ashwini Vaishnaw. The hike will benefit more than 1.17 crore people — over 48 lakh central government employees and around 68 lakh pensioners. Dearness Allowance is revised periodically to compensate government staff for inflation, and each revision directly raises the monthly take-home pay of one of the country’s largest organised workforces, while pensioners see a matching rise in their monthly relief. The DA decision was part of a package of four Cabinet decisions cleared in a single sitting, with a combined outlay of over Rs 21,252 crore. Alongside the DA hike, the Cabinet approved a Rs 10,000 crore Container Manufacturing Promotion Scheme to build a globally competitive container manufacturing ecosystem in India, reduce import dependence and strengthen supply-chain resilience. The container scheme will run for 13 years up to financial year 2039-40 and is expected to generate an estimated 3,000 direct jobs and over 50,000 indirect jobs, supporting ancillary industries such as specialised steel, corner castings, wooden frames and paints. It offers interest subvention, testing and certification assistance, land-leasing support and operational expenditure assistance to new facilities and expansions. The Cabinet also approved a Rs 1,857 crore Khelo India Sports Goods Manufacturing Scheme to boost domestic production of sports equipment, cut import dependence and grow exports and employment, and a Rs 7,395.55 crore rural governance yojana. Together, the four decisions span manufacturing, employee welfare, sports industry and grassroots governance, reflecting the Modi government’s push to combine industrial growth with direct relief for working families and pensioners.