Diwali bonanza: Cabinet hikes Dearness Allowance by 3% with over Rs 10,000 crore allocation

The Union Cabinet on Wednesday approved key development schemes worth Rs 29,267, including a Rs 10,016 crore for Dearness Allowance (DA) for Central government employees and pensioners ahead of Diwali festival.The DA/DR hike will be calculated as due from July 1, 2026 as the relief rate has gone up by 3%, from 60% to 63%.The DA hike follows the accepted formula based on the 7th Central Pay Commission's recommendations.6th CPC pay scale: DA/DR rises from 262% to 269% of basic pay (+7%) from 01.07.2026.5th CPC pay scale: DA/DR rises from 483% to 497% of basic pay (+14%) from 01.07.2026.