India to raise dearness allowance for central employees by 3% in July 2026

Based on the June 2026 Consumer Price Index for Industrial Workers (CPI‑IW) released by the Labour Bureau, the Indian government is expected to increase the dearness allowance (DA) for more than one crore central government employees and pensioners. The revised DA rate is projected at 63 % – a three‑percentage‑point rise from the current 60 % – pending Union Cabinet approval and an official notification.

Unions, including the All India NPS Employees Federation, have urged that the DA be calculated using the full decimal figure or merged with basic pay. If the government rounds up, the DA could reach 64 %, representing a 4 % hike. The increase would take effect on 1 July 2026, with arrears likely paid for earlier months.