DA hikes: From Finance Ministry to railways and banks — Here's a look at all the dearness allowance announcements so far

Dearness Allowance (DA) is a percentage of basic salary aimed at offsetting the impact of inflation 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.

DA is a component of the basic salary aimed at mitigating the rising cost of living. Notably, the basic salary also determines 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.

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 hikes and corresponding increase in Dearness Relief (DR).

All DA hike announcements this year: Full list

• 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.

• 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.

Diwali gift: Can we expect second DA hike in 2026?

Employees and pensioners are expecting another hike announcement this year. There was hope that a hike would come in July after monthly data from the Labour Bureau's All-India Consumer Price Index for Industrial Workers (AICPI-IW) is released. The index measures retail inflation by tracking fluctuations in the prices of goods and services consumed by industrial workers.

Based on data trends over the past months' expectation was for a 3-4% DA hike — AICPI-IW for March stood at 149.1, April at 149.9 and May at 150.8, while for June is estimated at 151.7 if the rate of growth remains constant. Further, the latest government data shows retail inflation rose to 4.38% in June 2026, while food inflation climbed to 5.32%. The final revision, however, will depend on the June 2026 AICPI-IW data and the government’s approval.

However, with July now past, beneficiaries could still see a second hike announced sometime in the second half of the year. According to past precedents, Labour and Employment Minister Ashwini Vaishnaw in October 2025 said the Union Cabinet cleared 3% DA hike, increasing the component to 53% of basic pay.

The year prior, in 2024 too, the Centre announced an increase ahead of the Diwali festive season. This year, Diwali is in November, so beneficiaries could expect a “Diwali gift” sometime in October or November this year.