In a Diwali bonanza, the Union Government on Wednesday approved a 3 per cent increase in dearness allowance (DA) for its employees and dearness relief (DR) for pensioners, taking the rate to 63 per cent from the existing 60 per cent. The revised rates will take effect retrospectively from July 1, 2026.According to an official statement, the additional installment of DA and DR has been approved to offset the impact of rising prices. “The combined impact on the exchequer on account of increase in both DA and DR would be Rs 10,016.10 crore per annum. This will benefit about 48.54 lakh employees and 68.71 lakh pensioners,” it said.The government said the revision follows the formula adopted under the 7th Pay Commission’s recommendations for periodic adjustment of DA and DR to compensate for inflation.