Government employees and pensioners have received festive-season relief as the Central Government and several states announced increases in Dearness Allowance (DA) ahead of Diwali. On October 28, the Union Cabinet approved a 3-percentage-point hike in DA for central government employees, taking it from 60% to 63% of basic pay with effect from July 1, 2026.
The revised allowance follows the formula recommended by the 7th Central Pay Commission. DA is calculated on basic pay rather than the employee’s total salary. The calculation is:
DA = Basic Pay × DA Rate ÷ 100
The increase will raise monthly payments for employees, while eligible beneficiaries will also receive arrears for the period covered by the revised rate.
How Much Will Central Government Employees Receive After the 3% DA Hike?
The financial benefit will depend on an employee’s basic salary. For example, a Level 1 employee drawing basic pay of ₹18,000 will receive ₹11,340 as DA at the revised rate of 63%, compared with ₹10,800 at the earlier rate of 60%.
This means an additional ₹540 per month. For the four-month period from July to October, the pending arrears will amount to ₹2,160.
Similarly, a Level 5 employee with basic pay of ₹29,200 will see the DA amount increase from ₹17,520 to ₹18,396.
The monthly increase for this employee will be ₹876, while arrears for July to October will total ₹3,504.
Tamil Nadu and Rajasthan Announce 3% DA Hike
Following the Central Government’s announcement, Tamil Nadu and Rajasthan also approved a 3-percentage-point increase in DA for their employees and pensioners.
Tamil Nadu: On October 31, the state government announced an increase in DA from 60% to 63% ahead of Diwali. According to a PTI report, the decision will benefit approximately 16 lakh state government employees, teachers, pensioners and family pensioners.
The revised allowance will apply from July 1, 2026. The increase is expected to add ₹1,858 crore annually to the state’s financial expenditure.
Rajasthan: The Rajasthan government approved a 3% increase in Dearness Allowance and Dearness Relief (DR) on October 30. The rate has been raised from 60% to 63% of basic pay, effective July 1, 2026.
More than 7 lakh government employees and over 5 lakh pensioners are expected to benefit. Chief Minister Bhajanlal Sharma approved the decision as a Diwali gift, with an additional financial burden of ₹820 crore on the state exchequer.
The revised DA and DR will be reflected in November and December salaries, respectively. Arrears for the four-month period from July to October will be deposited into employees’ General Provident Fund (GPF) accounts.
The Rajasthan government has also announced an ad hoc bonus for nearly 6 lakh eligible employees, involving an additional expenditure of ₹406 crore.
Madhya Pradesh Announces 2% DA Increase
The Madhya Pradesh government announced a 2-percentage-point DA hike on October 30 for state employees, officers and pensioners ahead of Diwali.
Chief Minister Mohan Yadav announced the decision through a social media post, stating that the allowance would increase by 2%.
According to the announcement, arrears for nine months, from January to September, will be paid in three equal monthly instalments. The increased DA from October will be included in salaries paid in November.
The report also mentions July as an effective date in a subsequent statement, creating a discrepancy with the earlier reference to January 1, 2026. The applicable date should therefore be confirmed through the state’s official notification.
Chhattisgarh Raises DA to 60%
The Chhattisgarh government announced a 2-percentage-point increase in DA on October 29. With this revision, the allowance will rise from 58% to 60% of basic pay, effective November 1, 2026.
Chief Minister Vishnu Deo Sai said the decision was taken keeping the interests of government employees and pensioners in mind ahead of Diwali.
The increase is expected to benefit around 3.85 lakh state government employees and 1.5 lakh pensioners. According to the government statement, the revised allowance will add approximately ₹36 crore to monthly expenditure and ₹432 crore annually to the state exchequer.
With the latest announcements, central government employees and beneficiaries in Tamil Nadu, Rajasthan, Madhya Pradesh and Chhattisgarh are set to receive revised DA benefits under their respective state and central government decisions.
Disclaimer: This article is intended for general informational purposes and is based on the announcements and reports mentioned in the source material. DA rates, effective dates, arrears payment schedules and eligibility conditions are subject to official government orders. Employees and pensioners should refer to the relevant government notifications for confirmation of their revised benefits.