Four states hike dearness allowance ahead of Diwali
Tamil Nadu, Rajasthan, Madhya Pradesh, and Chhattisgarh have increased dearness allowance for employees and pensioners.
The Union Cabinet approved a 3-percentage point increase in Dearness Allowance (DA) for central government employees on 28 October, according to Mint. The hike raises the component from 60 per cent to 63 per cent of basic pay, effective from 1 July 2026.
Following the Finance Ministry's announcement, four states also increased DA for state employees and pensioners. Tamil Nadu and Rajasthan implemented a 3 per cent hike, while Chhattisgarh and Madhya Pradesh announced a 2 per cent increase.
Tamil Nadu announced a 3 per cent hike on 31 October for approximately 16 lakh employees, teachers, and pensioners. The increase, effective from 1 July 2026, will cost the state exchequer ₹1,858 crore annually.
In Rajasthan, Chief Minister Bhajanlal Sharma approved a 3 per cent increase for over 7 lakh employees and 5 lakh pensioners. The hike is effective from 1 July 2026 and will cost the state ₹820 crore.
Madhya Pradesh Chief Minister Mohan Yadav announced a 2 per cent DA hike on 30 October, effective from 1 January 2026. Arrears from January to September will be paid in three equal monthly instalments.
Chhattisgarh Chief Minister Vishnu Deo Sai announced on 29 October that a 2 per cent hike will take DA to 60 per cent of basic pay. The decision, effective from 1 November 2026, will benefit around 3.85 lakh employees and 1.5 lakh pensioners.