Federal government announces continuation of Disparity Reduction Allowance at 15% of basic pay for eligible employees in BPS-1 to BPS-22.
The federal government has approved the continuation of the Disparity Reduction Allowance (DRA) 2026 for eligible government employees, providing financial relief to thousands of civil servants across the country.
According to an official notification issued by the Ministry of Finance, the Federal Government has sanctioned a 15 percent Disparity Reduction Allowance for employees serving in Basic Pay Scale (BPS) 1 to 22. The allowance will take effect from July 1, 2026, and will be payable under the existing terms and conditions.
The notification stated that the allowance will be calculated at 15 percent of the basic pay as on June 30, 2022. However, the benefit will only be available to those employees who are already receiving the Disparity Reduction Allowance under previous government decisions.
The continuation of the allowance is part of the government’s broader efforts to reduce salary disparities among federal employees and provide support against rising living costs. The measure is expected to help maintain the purchasing power of government workers amid inflationary pressures and increasing household expenses.
Officials said the allowance would continue to be paid alongside regular salary and other admissible benefits. Employees falling within BPS-1 to BPS-22 who are currently availing the allowance will automatically remain eligible under the revised arrangement from July 2026.
The approval of the Disparity Reduction Allowance comes as part of the federal government’s revised pay and allowances package for the fiscal year 2026-27. The government has recently announced several compensation-related measures aimed at improving the financial well-being of public sector employees.
The Disparity Reduction Allowance was originally introduced to address differences in compensation among various categories of government employees. Over the years, it has become an important component of the salary structure for many federal workers.
With the latest approval, eligible employees will continue to receive the allowance at the existing rate of 15 percent, ensuring continuity of financial support and reinforcing the government’s commitment to narrowing pay disparities within the public sector workforce.