DA hike pending arrears payment process: How money will be paid after states increased dearness allowance on Diwali
The Union Cabinet in October hiked dearness allowance (DA) and dearness relief (DR) by 3% for central government employees and pensioners, respectively. This raised the component from 60% to 63% of basic pay, effective from 1 July.
Beneficiaries include more than 1 crore people, including around 50 lakh central government employees and some 65 lakh pensioners, including defence and railway personnel and retirees. This hike is the second this year under the 7th Central Pay Commission (CPC) recommendations and comes after the government increased the allowance by 2% in April from 58% to 60%, effective from 1 January 2026.
Besides the Finance Ministry's announcement on 28 October, state governments also hiked DA for employees and pensioners ahead of Diwali and Chhath Puja. This includes 2% hikes by the Chhattisgarh, Kerala and Madhya Pradesh governments each; 2.5% increase by the Karnataka government, 3% DA hikes each by the Arunachal Pradesh, Bihar, Gujarat, Punjab, Rajasthan, Tamil Nadu and Uttarakhand governments; and 5% hike by the Himachal Pradesh government.
Arrears are payments due for the period between when salary revisions are applied and when they are actually paid. The amount is not automatically guaranteed and must be announced by the Centre or state governments. As a general guide, higher pay matrix levels and longer delays will likely result in larger salary and pension arrears for employees and pensioners, respectively.
Here's a look at what we know about payment of the hiked DA and pending arrears:
- Punjab DA hike payment, arrears
Earlier this month, Punjab Chief Minister Bhagwant Mann announced a 3-percentage-point increase in DA for state government employees and pensioners, benefiting around 8 lakh beneficiaries. He added that the enhanced DA would be reflected in December salaries and pensions, PTI reported.
With this announcement, the DA rate in Punjab has increased from 50% to 53%, effective from 1 November 2026, it added.
- How will the Arunachal Pradesh DA hike be paid?
Arunachal Pradesh increased DA and DR for state government employees and pensioners by three percentage points, from 60% to 63%, effective from 1 July as a “Diwali bonanza”, Chief Minister Pema Khandu said.
Besides state government employees and pensioners, the enhanced DA and DR will also benefit All India Services (AIS) officers serving under the state government as well as central government employees on deputation to Arunachal Pradesh and will be paid along with the salary and pension for the month of November, he added.
The CM said that arrears for the four-month period from July to October will be paid in cash and credited directly to the respective salary accounts of serving employees and the pension accounts of pensioners and family pensioners.
- Uttarakhand DA payment to come in cash
The Uttarakhand government also approved a 3% DA for state employees, increasing the component to 63% of basic pay, with effect from 1 July 2026 under the 7th Central Pay Commission (CPC), Chief Minister Pushkar Singh Dhami's Office said in a statement.
The decision brings Uttarakhand state employees' DA on par with their central government counterparts, it added. The statement added that the differential amount, i.e. DA arrears, for the period from 1 July to 31 October 2026, will be paid in cash to eligible employees.
- Uttar Pradesh hikes DA by 3%
Uttar Pradesh has increased dearness allowance by 3%, from 60% of basic pay to 63%, with effect from 1 July 2026, the state government said in an order issued last week. This decision will benefit lakhs of employees across the state and provide financial relief amid Diwali festivities, PTI reported.
The increased DA for October will be paid along with regular salary for November 2026, according to the PTI report. Further, an ANI report added that arrears for the preceding four-month period between July and September 2026 will be deposited separately into employees' provident fund (PF) accounts.
Jocelyn Fernandes is a journalist and editor with nearly 13 years of experience covering the business, corporate, economy and markets beats in news.<br> As chief content producer for around three years at Livemint (Hindustan Times), Jocelyn publishes breaking stories, explainers, features and live blogs on a range of business and economy topics, including the Budget, corporate developments, stock markets, income tax, money and personal finance, cryptocurrency, government policy, impact of US tariffs, international developments and more.<br> Jocelyn's writing philosophy is focused on delivering news in an accurate and accessible format for readers. She thus focuses her news coverage on explainers and FAQs in order to breakdown business, corporate, economic, and policy topics that are of importance to everyday readers.<br> She holds a Bachelors in Mass Media (BMM) and Post Graduate Diploma (PGD) in Journalism and Communication and has previously written for online business and markets news site Moneycontrol (Network18), Business-to-business (B2B) trade publications — the industry magazines Power Today and Solar Today (ASAPP Media), and the national news agency United News of India (UNI).<br> Outside of work, Jocelyn keeps up-to-date with local and international news, enjoys reading fiction books, novels and short stories, and enjoys movies, travelling and art. <br> She can be found on X and LinkedIn, and reached by email: <a href="jocelyn.fernandes@htdigital.in">jocelyn.fernandes@htdigital.in</a> <br> X/ Twitter handle: <a href="https://x.com/scribeJocelyn">@scribeJocelyn</a> <br> LinkedIn: <a href="https://in.linkedin.com/in/jocelyn-fernandes-journalist">LinkedIn</a>
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