3% hike in dearness allowance for central government employees cleared by cabinet (File Photo/ Representational)

The Centre Wednesday announced a 3 percentage point hike in the dearness allowance (DA) for its employees and dearness relief (DR) for pensioners over the existing rates of 60 per cent. The new rates will be effective retrospectively from July 1, 2026.

The government’s move to “compensate” its employees and pensioners against price rise comes ahead of Diwali.

The Union Cabinet, chaired by Prime Minister Narendra Modi , took the decision.

According to the statement issued after a meeting, the Union Cabinet “approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f.…