Summary
The change is expected to benefit about 4.85 million employees and 6.87 million pensioners.
The estimated cost to the national treasury is roughly 10,016 crore Indian rupees.
Key Points
5 points1
Dearness allowance is an extra payment to offset inflation.
2
Increase from 60% to 63% of basic salary.
3
Effective from 1 July 2026.
4
Beneficiaries: ~48.5 lakh central government workers and ~68.7 lakh pensioners.
5
Financial impact: about 10,016 crore rupees on the exchequer.
New Words to Learn
7 wordsdearness allowance
extra payment to help with cost of living
inflation
when prices of things go up
basic salary
main pay before extra benefits
exchequer
government money
crore
ten million
lakh
one hundred thousand
pensioner
a retired person who receives regular payments
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