The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a 3% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from July 1, 2025. With this increase, the DA and DR will rise from 55% to 58% of the basic pay or pension.
“Congratulations to all our central employees and pensioners,” said Union Minister Ashwini Vaishnaw at the cabinet media briefing. “Besides whatever happens after the increase by the central government, the employees of the state governments also get its direct benefit.”
The hike comes in line with the formula recommended by the 7th Central Pay Commission (7CPC), which is designed to help employees and pensioners maintain their purchasing power, and ease the burden of inflation.
The government has estimated that the combined financial impact of this increase will be around ₹10,084 crore per year. This benefit will reach approximately 1.17 crore people - including 49.19 lakh Central Government employees and 68.72 lakh pensioners.
On March 28, 2025, the Union Cabinet had last approved an increase in DA and DR, granting a 2% hike with effect from January 1, 2025. This raised the rate from 53% to 55% of the basic pay or pension.
The March decision benefitted nearly 48.66 lakh Central Government employees and 66.55 lakh pensioners, with an additional annual cost of ₹6,614.04 crore to the exchequer. Like the current hike, that increase too was made under the formula recommended by the 7CPC.
{{/usCountry}}The March decision benefitted nearly 48.66 lakh Central Government employees and 66.55 lakh pensioners, with an additional annual cost of ₹6,614.04 crore to the exchequer. Like the current hike, that increase too was made under the formula recommended by the 7CPC.
{{/usCountry}}Other than this, Wednesday’s Cabinet meeting cleared a wide range of measures across sectors with a total outlay of ₹1,20,107 crore. These included the approval of 57 new Kendriya Vidyalayas, a new mission for Atmanirbhar in Pulses, a major package for Rabi Minimum Support Prices, green nod for the four-laning of the Kaliabor-Numaligarh highway section in Assam, and the next phase of the Biomedical Research Career Programme.
Biomedical Research Career Programme (BOX)
The Union Cabinet has approved Phase 3 of the Biomedical Research Career Programme (BRCP) with an outlay of ₹1,500 crore, aimed at boosting biomedical and clinical research in India. The scheme, launched in 2008 through a DBT-Wellcome Trust (UK) partnership under the India Alliance, has so far supported over 700 grants and 500 fellowships, set up 130 laboratories, and led to over 30 patents.
Phase 3 (2025-31), with DBT contributing ₹1,000 crore and Wellcome Trust ₹500 crore, will support 401 researchers through fellowships, collaborative grants, and research management initiatives. It will also nurture early and mid-career scientists, and expand activities to tier-2 and tier-3 institutions.
Expected outcomes include training over 2,000 students and postdoctoral fellows, high-impact publications, new patents, greater women’s participation, and translational research advancing to higher readiness levels.
“A foundation is being laid by continuously investing in science and technology,” said IT, railways and I&B minister Ashwini Vaishnaw at the cabinet briefing, adding that biosciences have “the same potential as IT, semiconductors and AI.”