The Cabinet on Saturday approved a 2 per cent increase in Dearness Allowance (DA) for Central government employees, Union cabinet minister Ashwini Vaishnav announced.The DA for the central government employees was last revised in October, when it was increased from 55 per cent to 58 per cent.The hike was made effective from July 1, 2025, and was later implemented with arrears, benefiting both serving employees and pensioners.The government revises Dearness Allowance (DA) and Dearness Relief (DR) twice a year, in January and July, as part of its regular compensation framework for employees and pensioners. These adjustments are intended to offset the impact of inflation and help preserve 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 basic pay to offset inflation. It helps protect real income by ensuring salaries and pensions keep pace with rising prices.This comes amid wider demands from employee bodies for major changes in pay structure under the proposed 8th Pay Commission.In its memorandum, the National Council-Joint Consultative Machinery (NC-JCM) had sought a higher fitment factor of 3.83, which could raise the minimum basic pay from Rs 18,000 to about Rs 69,000.It has also proposed expanding the definition of “family” for pay calculations to include dependent parents, and suggested a cap on pay disparity, along with higher increments and inflation-linked allowances.Meanwhile, the Cabinet is also said to have approved a Sovereign Maritime Fund with a corpus of Rs 13,000 crore to provide stable and affordable insurance cover for Indian-flagged, India-bound and India-originating vessels.It is also learnt to have extended the Pradhan Mantri Gram Sadak Yojana (PMGSY) till 2028, with an additional allocation of Rs 3,000 crore.
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