DA hike: Sikkim increases dearness allowance by 2% for employees and pensioners, arrears to come before Dashain

DA hike: Sikkim Chief Minister Prem Singh Tamang on Saturday announced that the state government is hiking Dearness Allowance (DA) for employees and Dearness Relief (DR) for pensioners by 2% each, applicable from 1 January 2026, according to a PTI report.

Speaking at Paljor Stadium in Gangtok on 15 August, CM Tamang said the arrears will be paid before Dashain 2026, it added. The religious festival will be celebrated from 11 to 21 October, this year.

The announcement came during the 80th Independence Day celebrations in the state capital, which was attended by ministers, MLAs, government officials and senior police officers, among others, as per the report.

What is DA and DR, why are they important?

DA and DR are a percentage of basic salary aimed at mitigating the rising cost of living for government employees and pensioners. Reviewed twice a year, new announcements are usually made annually in March and October, with rollouts in July the same year and January in the next year.

As a component of basic salary, it impacts increase in base pay and further affects the other components of compensation, such as provident fund contributions, pension, allowances, gratuity, and more. Thus, higher DA, especially given DA merger demands, could lead to a substantial and automatic increase in overall pay and, consequently, in the other dependent allocations.

‘Focused on development’, says Sikkim CM

Tamang said the welfare of the people and fulfilling their aspirations would remain his government's top priority, adding that his government had remained focused on development, with the people's trust serving as its “greatest source of strength and inspiration”, the report added.

“From the very beginning, we have remained committed to placing the needs and aspirations of our citizens at the heart of governance and working tirelessly to build Sikkim as a model state. As we proudly hoisted our Tricolour high, we reaffirmed our collective resolve to build a ‘Sunaulo, Samriddha and Samarth’ (golden, prosperous and empowered) Sikkim," he said.

The chief minister added that the state had received a number of prestigious recognitions in recent times and attributed the achievements to the collective efforts of its people.

DA hikes: Finance Ministry, railways, banks, other states

• The Union Finance Ministry in April announced a 2% DA and DR hike for all central government employees and pensioners increased the component from 58% to 60% of basic salary, with effect from 1 January 2026.
• In the following months, the Indian Banks' Association (IBA) 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 and ₹1,17,000 and DA from ₹435 to ₹1,050.
• Later, the Indian Railways also announced a 2% DA and DR hike for its personnel.

• More than 1 crore individuals, comprising nearly 50 lakh central government employees and close to 65 lakh central government pensioners, including defence and railway personnel and retirees, benefit from the DA and DR hikes.
• 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, Odisha, 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.

(With inputs from Agencies)