New Delhi: The government on Wednesday approved a three per cent increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, effective from July 1, Union Minister Ashwini Vaishnaw said.

The hike, which was widely expected, comes as the festive season begins. This is the second increase this year, following a two per cent rise in March that took DA from 53 per cent of basic pay to 55 per cent. In October 2024, DA was also raised by three per cent.

Under the new revision, an employee with a basic salary of ₹60,000 will receive an additional ₹34,800 in DA, up from ₹33,000 after the March increase.

Further salary and allowance revisions will be determined by the Eighth Pay Commission, announced in January. While official notification regarding its members and terms of reference is still awaited, salary increments are expected to depend on the “fitment factor,” a multiplier applied to basic pay. Experts estimate the factor to range from 1.83 to 2.86, potentially yielding a hike of roughly 13 to 34 per cent. When the commission’s recommendations are implemented from January 1, 2026, the existing DA of 55 per cent is likely to be reset and merged with basic pay.

The 7th Pay Commission had previously reviewed nearly 200 allowances, abolishing 52 and merging others to simplify the salary structure. DA is provided to government employees to offset inflation. This month’s increase aligns with the movement of the Consumer Price Index (CPI) for industrial workers, which forms the basis for the bi-annual DA revision.