DA hike: Tamil Nadu, Madhya Pradesh, Rajasthan, Chhattisgarh increase dearness allowance by 2-3% ahead of Diwali
DA hike: The Union Cabinet on 28 October, approved a 3-percentage point increase in Dearness Allowance for central government employees, raising the component from 60% to 63% of basic pay, with effect from 1 July 2026.
The “Diwali gift” follows the 7th Central Pay Commission's recommended formula and will be calculated on basic pay, not the entire salary, as follows: DA amount = Basic pay × DA rate ÷ 100
In the above formula, a Level 1 central government employee earning ₹18,000 basic pay, will see DA increase by ₹540 per month from ₹10,800 to ₹11,340. Arrears pending from July to October will be ₹2,160.
Similarly, for a Level 5 employee, with a basic pay of ₹29,200, will see DA increase by ₹876 from ₹17,520 at the existing rate of 60% to ₹18,396 at the revised rate of 63%. Arrears till October would be ₹3,504.
Following the Finance Ministry's announcement, four states also hiked DA for state government employees and pensioners till October-end. This includes 3% DA hike by the Tamil Nadu and Rajasthan governments and 2% DA hike by the Chhattisgarh and Madhya Pradesh governments.
Tamil Nadu on 31 October announced a 3% DA hike, from the existing 60% rate to 63% ahead of the “Diwali festival of joy”, for state government employees, teachers and pensioners, PTI reported.
Benefitting around 16 lakh state government employees, teachers, pensioners, and family pensioners, the increase will be effective from 1 July 2026 and will cost the state exchequer ₹1,858 crore annually, it said.
Rajasthan on 30 October approved a 3-percentage point increase in DA and dearness relief (DR) for state government employees and pensioners, raising the rate from 60% to 63% of basic pay, PTI reported.
More than 7 lakh government employees and over 5 lakh pensioners will benefit from the DA and DR revision, effective from 1 July 2026. Chief Minister Bhajanlal Sharma approved the hike “as a Diwali gift to employees and pensioners” at additional financial burden of ₹820 crore on the state exchequer, an official statement read.
The increase will be paid in November and December salaries respectively, while arrears for the four-month period from July to October will be deposited in their General Provident Fund (GPF) accounts, it added.
Further, the Rajasthan state government also announced ad hoc bonus for close to 6 lakh eligible employees, entailing an additional expenditure of ₹406 crore.
Madhya Pradesh on 30 October announced a 2% DA hike for state government employees, including officers, and pensioners ahead of Diwali, with effect from 1 January 2026, PTI reported.
“The state government is increasing dearness allowance of employees and officers by 2 per cent. This will be payable from January,” Chief Minister Mohan Yadav said in a post on social media, adding that the government always stands with its employees.
He said that arrears for nine months, from January to September, will be paid in three equal monthly instalments. From October, the increased DA will be paid in cash in the salaries (October's DA payable in November salary).
Meanwhile, DA will be effective from July, Yadav said. “The government always stands with the interests of pensioners and employees and is continuously working keeping their welfare in mind. This increase in dearness allowance will provide financial relief to them,” he added.
The Chhattisgarh government on 29 October hiked DA by 2% taking it to 60% of basic pay from existing 58%, with effect from 1 November 2026, Chief Minister Vishnu Deo Sai announced.
“The state government is sensitive to the interests of its employees and pensioners. This decision taken ahead of Diwali will provide financial relief and enhance festive cheer among their families. The decision will benefit around 3.85 lakh state government employees and 1.5 lakh pensioners,” he said.
As per the statement, this will impose an additional financial burden of around ₹36 crore per month and ₹432 crore annually on the state exchequer.
(With inputs from PTI)
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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