DA hike news: 10-year growth - How central govt dearness allowance rate rose from 2% in 2016 to 63% in 2026 | Explained

Dearness allowance (DA) for central government employees has risen from 2% of basic pay in 2016 to 63% in 2026, following the latest 3-percentage-point hike approved by the Union Cabinet on Wednesday, October 28.

The government revises this allowance twice a year, with changes effective from January 1 and July 1. While the January revision is announced in March or April, the July revision is generally announced in October.

The latest revision is expected to benefit around 48 lakh central government employees and 68 lakh pensioners, as dearness relief (DR) for pensioners has also been hiked by 3% during this cycle. The combined annual cost of the increase in DA and DR is estimated at ₹10,016 crore.

The Union government raises the DA and DR rate to offset the impact of inflation and rising living costs on central government employees and pensioners.

Here's how the growth in DA rate looks like over the past decade:

— 2016: DA stood at 125% under the 6th pay commission in January. With the implementation of the 7th pay commission, this was incorporated into revised basic pay, resetting DA to 0% under the new pay structure. The allowance was subsequently raised to 2% in July 2016.

— 2017–2018: DA rose to 5% in 2017 and 9% in 2018.

— 2019: DA increased to 17%.

— 2020: DA remained frozen at 17% amid the Covid-19 pandemic.

— 2021: DA rose to 31% after frozen instalments were restored.

— 2022–2023: DA climbed to 38% in 2022 and 46% in 2023.

— 2024–2025: DA increased to 53% in 2024 and 58% in July 2025.

— 2026: DA rose to 60% in January and 63% in July.

Dearness allowance is calculated as a percentage of basic pay under the 7th Central Pay Commission's pay structure. The calculation does not include other salary components such as house rent allowance (HRA) or transport allowance.

DA calculation formula: DA amount = Basic pay × (DA rate ÷ 100).

For an employee drawing a basic salary of ₹18,000, DA at 60% would be ₹10,800 per month. With the revised DA rate of 63%, the amount will increase to ₹11,340 per month. This means the employee would now get an additional DA amoount of ₹540 per month, or ₹6,480 over 12 months.

The same formula applies to central government employees with any basic pay, whether drawing ₹30,000, ₹40,000, ₹50,000 or more, to calculate their DA amount and the hike they would receive.

Since DA is calculated as a percentage of basic pay rather than total monthly income, those receiving higher basic pay will get a larger monthly increase.

The effective date of the revised DA rate is July 1, 2026; thus, government employees will also be getting arrears from July 2026.

For an employee with a basic pay of ₹18,000, the additional DA would amount to ₹540 per month. If the hike is effective from July 2026, the total additional DA for four months, from July to October, would be ₹2,160.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.

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