Govt approves 2% Dearness Allowance increase for central govt employees, pensioners

The Union Cabinet has approved a 2% increase in dearness allowance (DA) for central government employees and pensioners, offering relief amid rising inflation. The revised allowance will be effective from January 1 and is part of the government’s routine biannual revision based on price trends.

Dearness allowance is linked to the Consumer Price Index for Industrial Workers (CPI-IW) and is revised twice a year to offset the impact of inflation on salaries and pensions. Although such revisions are typically announced earlier, this cycle saw a delay, leading to concerns among employee groups over the timing of the decision.

Apart from the DA hike, the Cabinet also approved the creation of a ₹13,000 crore Sovereign Maritime Fund aimed at strengthening India’s shipping sector by providing affordable insurance support to Indian-flagged vessels and ships operating to and from the country. The move is expected to reduce dependence on foreign insurers and enhance maritime resilience.

In another key decision, the government extended the Pradhan Mantri Gram Sadak Yojana till 2028 with an additional allocation of ₹3,000 crore. The extension is aimed at boosting rural infrastructure by improving road connectivity across villages, reinforcing the government’s focus on long-term development.