New Delhi: The Union Cabinet on Wednesday approved a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for 49.19 lakh central government employees and 68.72 lakh pensioners.

The revision, effective from July 1, 2025, raises DA/DR from the existing 55% of basic pay/pension to offset the price rise. The hike will cost the exchequer ₹10,083.96 crore annually, Information and Broadcasting Minister Ashwini Vaishnaw said after the Cabinet meeting.

The increase is in line with the formula recommended by the 7th Central Pay Commission.

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