The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the release of an additional instalment of Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners with effect from July 1, 2025, representing an increase of 3 per cent over the existing rate of 55 per cent of the basic pay/pension, to compensate them against the price rise.

The combined impact on the exchequer on account of an increase in both the DA and the DR would be Rs 10,083.96 crore per annum. This will benefit about 49.19 lakh Central government employees and 68.72 lakh pensioners, according to an official statement.

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This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,

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