UPSC Prelims Practice Questions — Cabinet approves additional instalment of Dearness Allowance to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2026

Q1. With reference to the additional instalment of Dearness Allowance/Dearness Relief approved by the Union Cabinet with effect from 01.01.2026, consider the following statements: Which of the statements given above is/are correct?

  1. The revised rate is 60% of Basic Pay/Pension, representing a 2 percentage-point rise over the immediately preceding rate of 58%.
  2. Whereas the July 2025 instalment had raised the rate by 3 percentage points, the January 2026 instalment raised it by 2 percentage points.
  3. The revision took effect from the date of the Cabinet's approval rather than retrospectively from 1 January 2026.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q2. With reference to the Dearness Allowance/Dearness Relief instalment approved with effect from 01.01.2026, consider the following statements. Which of the statements given above is/are NOT correct?

  1. The additional instalment was approved by the Union Cabinet.
  2. The hike is expected to benefit about 50.46 lakh central government employees.
  3. The increase is intended to compensate employees and pensioners against price rise.
  4. The Dearness Allowance orders giving effect to this hike are issued by the Reserve Bank of India.
  • A. 1 and 2
  • B. 2 and 3
  • C. 1, 3 and 4
  • D. 4 only

Q3. With reference to the index and periodicity governing Dearness Allowance revision, consider the following statements. Which of the statements given above is/are correct?

  1. The All India Consumer Price Index for Industrial Workers (AICPI-IW) is compiled by the Labour Bureau under the Ministry of Labour and Employment.
  2. The current series of the CPI-IW is on the base year 2016=100.
  3. Dearness Allowance/Dearness Relief for central government employees and pensioners is revised twice a year, effective 1 January and 1 July.
  4. The AICPI-IW is compiled by the National Statistical Office under the Ministry of Statistics and Programme Implementation.
  • A. 1, 2 and 3
  • B. 2, 3 and 4
  • C. 1 and 4 only
  • D. 1, 2, 3 and 4

Q4. With reference to the All India Consumer Price Index for Industrial Workers (AICPI-IW), consider the following statements. Which of the statements given above is/are NOT correct?

  1. It is used for regulation of wages and dearness allowance for millions of workers and employees.
  2. It is compiled monthly from retail prices collected at selected centres across the country.
  3. It has been compiled by the Labour Bureau since 1944.
  4. It is released on a quarterly basis rather than monthly.
  • A. 1 and 2
  • B. 2 and 3
  • C. 1, 2 and 3
  • D. 4 only

Q5. With reference to the Seventh Central Pay Commission (7th CPC) as compared with the earlier pay structure, consider the following statements: Which of the statements given above is/are correct?

  1. The recommendations of the 7th CPC were implemented with effect from 1 January 2016.
  2. The 7th CPC replaced the earlier system of pay bands and grade pay with a new pay matrix.
  3. Under the 7th CPC the minimum monthly salary was retained at ₹7,000, unchanged from the previous pay commission.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q6. Central Pay Commissions, including the Seventh Central Pay Commission, are constituted and their pay/allowance decisions operationalised primarily under the administrative aegis of which one of the following?

  • A. Department of Expenditure, Ministry of Finance
  • B. Department of Personnel and Training, Ministry of Personnel
  • C. Department of Pension and Pensioners' Welfare, Ministry of Personnel
  • D. NITI Aayog

Q7. Orders for the grant of Dearness Relief (DR) to central government pensioners are issued under the authority of which one of the following?

  • A. Department of Pension and Pensioners' Welfare, Ministry of Personnel, Public Grievances and Pensions
  • B. Department of Expenditure, Ministry of Finance
  • C. Department of Financial Services, Ministry of Finance
  • D. Central Pension Accounting Office

Q8. In the context of central government pensions, the term 'Dearness Relief' most precisely refers to which one of the following?

  • A. The inflation-compensating component paid, as a percentage of basic pension, to pensioners and family pensioners
  • B. The ex-gratia lump sum paid to an employee at the time of superannuation
  • C. A one-time relief granted to the family on the death of a pensioner
  • D. The commuted portion of pension paid in advance to the pensioner

Q9. The figure of ₹6,791.24 crore cited in connection with the DA/DR revision effective 01.01.2026 denotes which one of the following?

  • A. The combined additional burden on the exchequer per annum on account of both Dearness Allowance and Dearness Relief
  • B. The additional annual burden on account of Dearness Allowance to serving employees alone
  • C. The total annual DA and DR outlay (not merely the incremental hike) for all beneficiaries
  • D. The one-time arrears payable for the January–June 2026 period

Q10. The Dearness Allowance rate for central government employees first reached the 50% mark with effect from which one of the following dates?

  • A. 1 January 2024
  • B. 1 July 2024
  • C. 1 January 2025
  • D. 1 July 2023

Q11. The formula presently used for periodic revision of Dearness Allowance/Dearness Relief for central government employees and pensioners derives from the recommendations of which one of the following?

  • A. The Seventh Central Pay Commission
  • B. The Labour Bureau
  • C. The Fifteenth Finance Commission
  • D. The Sixth Central Pay Commission

Q12. With reference to the distinction between Dearness Allowance (DA) and Dearness Relief (DR), consider the following statements. Which of the statements given above is/are correct?

  1. Dearness Allowance is paid to serving central government employees, whereas Dearness Relief is paid to pensioners.
  2. Dearness Allowance is computed as a percentage of Basic Pay, whereas Dearness Relief is computed as a percentage of basic pension.
  3. At each biannual revision, DA and DR are enhanced by the same percentage rate.
  4. Dearness Relief is payable only to serving employees who have completed a prescribed minimum period of service.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 2, 3 and 4
  • D. 1 and 4 only