Dearness Allowance: From DA hikes and arrears announced by states to pay commission decisions — Latest updates

Dearness Allowance (DA) is the salary component aimed at addressing inflationary pressures for central government employees, public sector staff, defense personnel, bank employees and pensioners. It is part of employees' basic pay and fluctuates based on inflation.

The Centre's 8th pay commission (8th CPC) is conducting meetings with employee representative groups, unions and stakeholders to gather recommendations on pay hikes, allowances, salary structure, and more. Constituted every 10 years, the panel is expected to make significant decisions impacting salaries of central government employees and pensioners, including railways and defence staff by mid-2027.

As many as 50 lakh central government employees, including defence personnel, and around 65 lakh retired central government pensioners, including defence retirees benefit from increase in DA and DR component. Meanwhile, HRA benefits apply to many salaried individuals in India.

DA, DR announcements this year: Latest updates

• DA is revised bi-annually by the All-India Consumer Price Index (AICPI) to mitigate cost-of-living expenses. New announcements are made in March and October, with rollouts scheduled in January and July.
• The Finance Ministry in April announced revision in DA and DR by 2%, up from 58% to 60% of Basic Pay, with effect from 1 January 2026.

• On 2 May, the Indian Banks' Association (IBA) also 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 Indian Railways on 13 May. The Railway Board said DA and Dearness Relief (DR) have been revised for lakhs of employees, pensioners, family pensioners, and other eligible beneficiaries covered under the 7th Central Pay Commission (CPC) framework.
• Further, following the central government, various states, including Arunachal Pradesh, Bihar, Odisha, Tamil Nadu and Uttar Pradesh (2% hikes each) and Tripura (5% hike), announced DA and DR hikes under 7th CPC, for their respective state government employees and pensioners.

• Meanwhile, Maharashtra approved payment of ₹800 crore DA arrears for state government employees under the 5th, 6th and 7th central pay commissions for November and December 2025 and January 2026. It also approved 2% increase in DR for retired All India Services officers.
• The Joint Action Committee (JAC) of road transport corporation workers' unions in Karnataka is demanding 25% salary hike and for payment of DA arrears for 38 months (totalling ₹1,272 crore) in a single instalment, and merger of 31% DA component in basic pay, along with increases in daily bata (wages) and other allowances.

• The Punjab 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 Joint Struggle Forum of State Government Employees on 1 June said West Bengal CM Suvendu Adhikari assured them the state will implement the Supreme Court's order on payment of DA dues for the period between 2008 to 2019. Earlier in May, the state approved formation of its 7th state pay commission to decide salary and DA hikes for state government employees, educational institutions, government corporation and board staff, and state government-aided bodies.

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