DA hike: Odisha announces 5% Dearness Allowance increase for employees, pensioners under pre-revised pay scales

The Odisha state government on 23 July approved a 5% hike in dearness allowance (DA) and Dearness Relief (DR) for state government employees and pensioners, respectively, under the pre-revised Odisha Revised Scales of Pay (ORSP) Rules, 2008, according to a report by the Orrisa Post.

It added that the move is set to benefit employees and pensioners including teaching and non-teaching staff of government aided educational institutions, universities, subordinate judicial officers, work-charged employees and job contract workers.

Odisha DA hike under ORSP Rules: What we know

An official notification from the Odisha state finance department states the revised DA has been hiked from 257% to 262% of combined basic and grade pay, with effect from 1 January 2026, as per the report.

Arrears for the January to June 2026 period will be paid in cash, while adjustment for July will be made in the salary, it added.

Approved by the Chief Minister Mohan Charan Majhi government, the notice said that the hike aligns with the Centre's DA hike and will be adjusted in the state's fiscal targets. Notably, earlier in May, the state had hiked DA by 2% for other state government employees and pensioners, taking the component to 60% of basic pay, from 58%.

DA hikes: What has been announced

A component of the basic salary, Dearness Allowance aims to help mitigate cost-of-living expenses for central government employees, public sector staff, defence personnel, bank employees, and pensioners. DA is revised bi-annually by the All-India Consumer Price Index (AICPI) with new announcements in March and October followed by rollouts in January and July.

Notably, after the Centre's announcement came increases by the Indian Banks' Association (IBA) — hiked basic salaries between ₹48,000 to ₹1,17,000 and DA from ₹435 to ₹1,050 for workmen and officer employees across levels for the months of May, June and July 2026; and the Indian Railways — hiked DA by 2%.

On 15 May, Odisha announced a 2% increase in DA for state government employees and pensioners, up from 58% to 60%, effective from 1 January, as per a statement from the Chief Minister's Office (CMO). It added that this would be paid along with the May salary.

Alongside this, the temporary increase (TI) for pensioners was also raised by 2% and will be reflected in the May pension. Around 8.5 lakh state government employees and pensioners are expected to benefit from the announcement.

Various state governments also increased salaries in order to close gaps in payment with the central government. The latest being West Bengal, which hiked DA by 20% last month with effect from October taking the component to 38% of basic salary.

Prior to this, Arunachal Pradesh, Assam, Tamil Nadu and Uttar Pradesh each approved 2% hikes, while Bihar implemented 2% hike for staff under the 7th pay commission, 5% hike for employees under 6th CPC and 9% for staff under 5th CPC.

Further, Maharashtra greenlit payment of ₹800 crore DA arrears under the 5th, 6th and 7th CPCs for November and December 2025, and January 2026; and 2% DR hike for retired All India Services officers.

Is a second DA hike from Centre likely in 2026?

While there is no official word yet, the debate over a higher DA revision has gained momentum. Employees and pensioners are increasingly looking forward to another 2-3% hike this year. Latest government data shows retail inflation in June 2026 rose to 4.38%, while food inflation climbed to 5.32%.

The final revision, however, will depend on the June 2026 data from the Labour Bureau's All-India Consumer Price Index for Industrial Workers (AICPI-IW) and the government’s approval. Notably, AICPI-IW trends support a 3-4% DA hike — data for March 2026 showed the index at 149.1, for April 2026 at 149.9 and for May 2026 at 150.8, and for June 2026 is estimated at 151.7, assuming the increase continues at same rate as in May.

Thus, even if no DA hike is announced this month, central government employees and pensioners could still see a second hike announcement sometime in the second half of the year.