Central government employees and pensioners are waiting for the Union Cabinet’s meeting on Wednesday, October 21, hoping for a decision on the overdue hike in dearness allowance (DA) and dearness relief (DR), which should have kicked in from July 1, 2026. The government hasn’t confirmed whether this issue is even on the table for that meeting, or what the new rate might be.
Still, employee groups are expecting good news. They think DA will go up by 3 percentage points—from 60% of basic pay to 63%. If that happens, it’ll be backdated to July 1, 2026, and everyone covered will get arrears for the months since then.
Why is October 21 such a focus?
Basically, after the Cabinet met on October 14 and said nothing about DA/DR, everyone started looking to the next meeting. That earlier meeting did approve a big productivity-linked bonus: 78 days’ wages for about 11.4 lakh railway employees. But when it came to DA, there was no word.
Now all eyes are on October 21, the day after Dussehra. Employee unions really expect the government to announce the DA hike this time—though, once again, the government isn’t confirming anything.
C. Srikumar, who’s secretary at the All India Defence Employees’ Federation, told ET Wealth Online he thinks the DA increase will “most likely” be cleared by the Cabinet this Wednesday. On the other hand, Manjeet Patel, president of the All India New Pension Scheme Employees’ Federation, doesn’t expect any news before that meeting.
How did they arrive at 63%?
DA (for employees) and DR (for pensioners) get revised twice a year—on January 1 and July 1. The rate for July 2026 is based on the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW), covering July 2025 to June 2026.
According to the Labour Bureau, the CPI-IW went up by 1.1 points in June 2026 to 151.9, which means the 12-month average stands at 149.54. Using the Seventh Pay Commission’s formula, this works out to 63.7%. The government, as usual, only counts the whole number, so the proposal is for 63%.
Right now, DA sits at 60%, after a 2-point hike became official from January 1, 2026. That was announced this April.
Unions ramp up the pressure
Employee groups want the hike cleared—no more delays. The Confederation of Central Government Employees and Workers wrote to the Department of Expenditure, pushing for an immediate decision on the July 1 hike for both employees and pensioners.
They also organized lunch-hour protests nationwide on October 16, demanding two things: the DA/DR increase from July 1 and quick payment of festival bonuses.
This revision matters for a lot of people—about 1.2 crore employees and pensioners, if current reports are right. The exact financial impact and the final list of beneficiaries will become clear only when the government makes its official move.
There’s no set day for DA announcements
Cabinet meetings usually happen on Wednesdays, but DA hikes don’t always get announced then. The last one was on a Saturday, April 18, 2026. Previous ones landed on Wednesday, October 1, 2025, and Saturday, March 28, 2025.
So, while October 21 is a strong possibility, it’s not guaranteed. The new rate, when it starts, and arrears—that’s all still waiting for the Finance Ministry’s official notification after Cabinet approval.
What employees can expect
If the government signs off on the 3-point hike, DA goes up from 60% to 63% of basic pay. Pensioners will see their DR increased in the same way. The change will be effective from July 1, 2026, and eligible folks will get back pay for the months since then, up to December 2026.
Until the Cabinet actually decides and publishes a formal order, 63% is just the best estimate—based on the published CPI-IW numbers, not an official figure yet.
