Dearness Allowance: DA is a component of the basic salary of central government employees, public sector staff, defence personnel, bank employees and pensioners that is periodically adjusted for inflation.
Revised twice annually by the All-India Consumer Price Index (), with new announcements usually made in March and October and rollouts scheduled in January and July, it is aimed at mitigating the rising cost of living and has an impact on employees’ salaries.
DA is fully taxable and subject to at the applicable slab rate. Notably, DA is available only to public-sector employees.
About 50 lakh central government employees and around 65 lakh retired central government pensioners, including defence personnel and retirees, will benefit from an increase in DA and Dearness Relief () components.
List of states considering DA hikes: Check details
- government on 30 May said it will consider payment of pending DA and DR dues to state government employees (across categories) and pensioners for the period between 1 July 2021 to 31 March 2024. It added that a sub-committee will discuss payment of arrears for employees and pensioners based on revised salary and pension benefits for the period between 1 January 2016 to 30 June 2021.
- The West Chief Minister Suvendu Adhikari has confirmed that the DA announcement for government employees and pensioners will be made in the next state Budget on 22 June. On the 7th state pay commission, he added that DA arrears between 2016 and 2019 have been paid to nearly 3 lakh employees and pensioners, the report added. Earlier he assured that the state will implement the Supreme Court’s order on payment of DA dues.
- Pradesh government is reviewing DA and pending arrears for state employees and pensioners, Chief Minister Sukhvinder Singh Sukhu said. The Finance Department has been directed to withdraw its notice regarding the deferment of salaries and release the pending pension arrears. Sukhu called government employees the backbone of the state, and said the government remained committed to safeguarding their welfare and interests.
DA announcements: Finance Ministry announces 2% hike
Notably, this comes after the Ministry of in April revised DA and dearness relief (DR) by 2% with effect from 1 January this year. This effectively takes the component up from 58% to 60% of Basic Pay. Revised bi-annually by the All-India Consumer Price Index (AICPI), new DA announcements are made in March and October, followed by rollouts in January and July.
Later in May, the Indian Banks’ Association () announced revised DA and DR for workmen and officer employees across levels for the months of May, June and July 2026. It hiked basic salaries between ₹48,000 to ₹1,17,000 and DA from ₹435 to ₹1,050.
This was followed by a 2% DA and DR hike announced by the . The Railway Board said DA and DR have been revised for lakhs of employees, pensioners, family pensioners, and other eligible beneficiaries covered under the 7th pay commission framework.
Can employees expect a DA hike next month?
India’s surged to a new high of 9.68% in May from 8.26% in April, driven by a sharp rise in fuel, crude petroleum and manufactured chemical and metal product prices. According to government data, retail inflation in April also rose to 3.48%, while food inflation climbed to 4.20%.
Rising prices of food (milk, vegetables and other essentials), power and fuel (CNG, diesel and petrol) are putting pressure on household budgets, and an adjustment in DA would significantly help address concerns for burdened middle-class households, lower-income groups and daily commuters.
The debate over a higher DA revision has thus gained momentum amid inflationary pressures, with employees and pensioners increasingly looking towards a hike in July this year for relief against steadily rising living expenses.