The Cabinet on Saturday approved a 2 per cent increase in dearness allowance (DA) for central government employees, according to sources.The account reserved for central government employees was last reviewed in October, when it was increased from 55 per cent to 58 per cent.
The increase was effective from July 1, 2025, and was subsequently implemented with arrears, benefiting both active and retired employees.The Government reviews the Bereavement Allowance (DA) and Bereavement Relief (DR) twice a year, in January and July, as part of its regular compensation framework for employees and pensioners. These adjustments aim to offset the impact of inflation and help maintain their purchasing power and standard of living.Dearness Allowance (DA) is a cost-of-living adjustment paid to government employees, calculated as a percentage of base salary to compensate for inflation. It helps protect real income by ensuring that salaries and pensions keep pace with rising prices.This comes amid wider demands from employee bodies for major changes in the pay structure under the proposed 8th Pay Commission.In its memorandum, the National Council Joint Consultative Mechanism (NC-JCM) sought a higher suitability factor of 3.83, which could raise the minimum basic wage from Rs 18,000 to around Rs 69,000.
It also proposed expanding the definition of “family” for calculating wages to include dependent parents, and proposed a cap on wage disparity, along with higher increases and inflation-linked bonuses.Meanwhile, the Cabinet is also said to have approved setting up of a Rs 13,000-crore Sovereign Marine Fund to provide stable and affordable insurance cover to Indian-flagged ships bound for India and ships of Indian origin.It is also learned that the Pradhan Mantri Gram Sadak Yojana (PMGSY) has been extended till 2028, with an additional allocation of Rs 3,000 crore.