The Union Cabinet of India has officially approved a two-percentage-point increase in the dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, raising both to 60% of their respective basic pay and pension. This decision, made during a meeting chaired by Prime Minister Narendra Modi, will take effect from January 2026 and is expected to benefit around 12.2 million individuals, including 5.4 million employees and 6.8 million pensioners. The increase will result in an additional annual expenditure of ₹6,791.24 crore (approximately $815 million USD) for the government. The adjustment is based on the Consumer Price Index for Industrial Workers (CPI-IW), which serves as the benchmark for salary and pension revisions. The government typically revises DA and DR twice a year, in January and July, to counter the effects of inflation. This increase comes amid ongoing labor unrest in private sectors, highlighting broader concerns about wages and working conditions. Moreover, the government has initiated processes for the 8th Pay Commission, which will propose further revisions to salaries and allowances, with a deadline for suggestions set for April 30, 2026.