DA hike: Tamil Nadu, MP, Himachal, Rajasthan, Kerala — Full list of states with dearness allowance hikes ahead of Diwali

The Union Cabinet has hiked dearness allowance by 3% for central government employees and pensioners, raising the component from 60% to 63% of basic pay, effective from 1 July, as per the 7th Central Pay Commission (CPC) recommendation.

Under the 7th CPC recommendations, DA is revised twice a year, using data from the All-India Consumer Price Index (AICPI). This “Diwali gift” is the second DA increase this year, after the Centre hiked the component by 2% in April from 58% to 60%, effective from 1 January.

DA is a percentage of employees' basic pay that aims to mitigate the impact of the rising cost of living and inflation. Usually, announcements from the Centre come in March and October, with rollouts in January and July. Over 1 crore beneficiaries — about 50 lakh central government employees and nearly 65 lakh pensioners, including defence and railway personnel and retirees gain from DA and dearness relief (DR) hikes.

Besides the Finance Ministry's announcement on 28 October, state governments also hiked DA for employees and pensioners ahead of Diwali. This includes a 5% hike by the Himachal Pradesh government, 3% DA hikes each by the Tamil Nadu and Rajasthan governments, and 2% increases by the Chhattisgarh, Madhya Pradesh and Keralam 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. Benefiting 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. This is the second DA increase this year — the state also hiked DA by 2% to 60% of basic pay, effective from 1 January at additional annual expenditure of ₹1,230 crore.
• Rajasthan on 30 October approved a 3% increase in DA and DR for state employees and pensioners to 63% of basic pay. Over 7 lakh government employees and over 5 lakh pensioners will benefit from the revision, effective from 1 July 2026, “as a Diwali gift,” at an additional financial burden of ₹820 crore on the state exchequer. The increase will be paid in the 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.

• Also on 30 October, Madhya Pradesh announced a 2% DA hike for state government employees, including officers and pensioners, ahead of Diwali, with effect from 1 January. CM Mohan Yadav said 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 with salaries (October's DA payable in November salary). Meanwhile, DR will be effective from July.
• The Chhattisgarh government on 29 October hiked DA by 2%, taking it to 60% of basic pay from the existing 58%, with effect from 1 November, at an additional financial burden of around ₹36 crore per month and ₹432 crore annually on the state exchequer. “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,” CM Vishnu Deo Sai said.
• Earlier in the month, Himachal Pradesh increased DA by 5%, from 45% to 50%, for eligible state government employees covered by the Himachal Pradesh Civil Services (Revised Pay) Rules, 2022, All India Services officers and state government employees covered by UGC pay scales. The additional DA will be paid in cash with the October 2026 salary, payable in November 2026.

• Kerala hiked DA and DR by 2% from 35% to 37%, to be paid with the October 2026 salary, disbursed in November, for state government employees, teachers, full-time contingent employees and local government staff, state service pensioners, family pensioners, and eligible ex-gratia pensioners and their families. This was the second increase following a 10% hike from 25% to 35% in February 2026. The state said it will provide additional relief to eligible employees and pensioners amid rising inflation and turbulent geopolitical times. It added that separate arrears orders will clarify the payment of pending dues.

Notably, after the Centre's April announcement, the Indian Banks' Association (IBA) revised the DA and DR for employees for May, June and July 2026. Later, the Indian Railways also announced a 2% hike in DA and DR for staff and pensioners. Further, several states also followed the DA and DR hike announcements, including Telangana, Sikkim, Punjab, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Maharashtra, Odisha, Uttar Pradesh and West Bengal.

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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