Union Cabinet hikes DA/DR by 3% for employees, pensioners, sanctions 57 new Kendriya Vidyalayas

New Delhi: The Union Cabinet on Wednesday increased Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent for about 49.19 lakh central government employees and 68.72 lakh pensioners and also approved opening of 57 new Kendriya Vidyalayas across the country.
Reports said that DA/DR increase of 3 per cent over the existing rate of 55 per cent of the basic pay/pension to compensate against the price rise will be effective retrospectively from July 1, 2025.
Union Information and Broadcasting Minister Ashwini Vaishnaw while briefing on decisions taken in the Cabinet meeting told reporters here that the combined impact on the exchequer on account of an increase in DA and DR will be Rs 10,083.96 crore per annum.
“The increase is in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission,” he added.
The Minister said the Union Cabinet also approved the opening of 57 new Kendriya Vidyalayas (KVs) which would benefit over 86,000 students.
Out of the 57 new KVs, seven will be sponsored by the Union Home Ministry, and the rest by state governments. Twenty of the newly approved KVs are proposed to be opened in districts where no KV presently exists despite a significant number of Central Government employees.
“The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the opening of 57 new Kendriya Vidyalayas under the Civil sector across the country to facilitate the educational needs of the wards of the increased number of central government employees,” Vaishnaw said.
The total estimated requirement of funds for establishment of the 57 new KVs is Rs 5862.55 crore spread over a period of nine years from 2026-27. This includes a capital expenditure component of Rs 2585.52 crore and operational expenditure of Rs 3277.03 crore