According to reports from Mint, approximately 50 lakh central government employees, including defence personnel, and around 65 lakh retired central government pensioners, including defence retirees benefit from increases in DA and DR components. These include varying degrees of increase in pay across 18 levels of employees' or pensioners' basic pay. Notably, DA and DR are only provided by the central government for its employees and retirees, with the private sector in India not offering similar benefits for its employees or pensioners.
As reported by Mint, DA is a component of central and public sector employees' salary break-up, aimed at mitigating increased cost-of-living expenses and revised biannually by the All-India Consumer Price Index (AICPI) based on inflation metrics in early March and October, followed by rollouts in January and July. DR is a component of the payout due to central and public sector pensioners, similarly aimed at mitigating increased cost-of-living expenses and impacts the in-hand pension payout for retired central government staff. The main difference lies in who and when the benefit applies - DA affects employee salaries while DR impacts pension payouts, with the calculation and application process remaining the same for employees and retirees.
According to Mint, DA and DR were hiked by 2% for all central government employees and pensioners with effect from 1 January 2026, as per recommendations of the 7th pay commission, taking the DA component in basic pay from 58% to 60% of salary. On 2 May, the Indian Banks' Association (IBA) announced revised DA and DR for workmen and officer employees across levels for May, June and July 2026, hiking basic salaries between ₹48,000 to ₹1,17,000 and DA from ₹435 to ₹1,050. This was followed by a 2% DA and DR hike announced by the Indian Railways on 13 May.
As reported by Mint, following the central government, various states including Arunachal Pradesh, Bihar, Odisha, Tamil Nadu and Uttar Pradesh announced DA and DR hikes under 7th CPC for their respective state government employees and pensioners. Tripura announced a 5% hike, while the Maharashtra government approved payment of DA and DR arrears for state government employees, totalling ₹800 crore for November and December 2025 and January 2026 dues pending as per the 5th, 6th and 7th CPCs, to be disbursed with salaries in May.
According to Mint, the DA and DR hikes are calculated based on the 12-month average as per the method prescribed by the AICPI under the 7th Pay Commission. Under this CPC, there have been 10 hikes since 2021, with the highest at 11% in July 2021. The past two hikes were 2% and 3%, respectively, for January and July 2025. Since DA is connected to cost-of-living, the amount differs for each employee depending on their work location and can vary depending on the area being urban, rural or semi-urban.
