Dearness Allowance hikes in 2026: Which states have increased DA, who benefits, what happens next?

Dearness Allowance (DA), a crucial salary component for government employees and pensioners, has once again come into focus after a series of revisions by the Centre and several state governments in 2026. Designed to offset the impact of inflation and rising living costs, DA is paid to central and state government employees, public sector workers, defence personnel, bank employees, and pensioners.

The allowance is revised twice a year based on movements in the All-India Consumer Price Index (AICPI). Typically, announcements are made around March and October, with revised rates implemented from January and July, respectively.

Centre raises DA to 60%

The latest round of revisions began after the Union government increased Dearness Allowance (DA) and Dearness Relief (DR) by 2 percentage points in April 2026, effective from January 1. The move raised DA and DR from 58% to 60% of basic pay, benefiting millions of central government employees and pensioners.

Following the Centre’s decision, several states announced similar hikes for their workforce.

UP, Assam, Arunachal Pradesh, Tamil Nadu

The Uttar Pradesh government has increased the dearness allowance (DA) of government employees and pensioners by 2% from 58% to 60%. This increased DA has come into effect from January 1, 2026, which is benefiting about 16 lakh employees and 12 lakh pensioners of the state.

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Assam approved a 2% increase in DA and DR, taking the rate to 60% with immediate effect. The decision is expected to benefit more than 8 lakh serving employees, pensioners, family pensioners and other beneficiaries.

Arunachal Pradesh also raised DA and DR by 2%, effective January 1, 2026. The revised rate of 60% will benefit more than 69,000 employees and over 40,000 pensioners. The state government estimates the annual financial burden at around ₹100.54 crore, with arrears for the January-April period estimated at ₹33.51 crore.

Tamil Nadu announced a similar 2% increase, benefiting nearly 16 lakh government employees, teachers, pensioners and family pensioners. The state estimates an additional annual expenditure of approximately ₹1,230 crore due to the revision.

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Bihar and Odisha

Bihar introduced different DA increases depending on the pay commission category. Employees and pensioners covered under the 7th Pay Commission received a 2% increase to 60%, while those under the 6th and 5th Pay Commissions received hikes of 5 percentage points and 9 percentage points, respectively.

Odisha also increased DA and DR by 2%, taking the rate to 60% from January 1. Around 8.5 lakh employees and pensioners are expected to benefit from the move.

Banks, Railways and arrears

Apart from state governments, other sectors have also seen DA-related revisions. The Indian Banks’ Association (IBA) revised DA and DR rates for bank employees for May-July 2026, resulting in higher salary-linked allowances across different pay scales.

Indian Railways announced a 2% increase in DA and DR for employees, pensioners and family pensioners covered under the 7th Central Pay Commission framework.

Meanwhile, Maharashtra approved payment of around ₹800 crore in DA arrears to employees covered under the 5th, 6th and 7th Pay Commissions. Punjab is examining pending DA and DR dues, while West Bengal continues discussions on long-standing DA arrears following employee demands and court-related developments. In Karnataka, transport corporation workers’ unions are seeking payment of 38 months of DA arrears along with salary revisions.

MUST READ: Uttar Pradesh hikes Dearness Allowance by 2%; over 16 lakh employees, pensioners to benefit

Another DA hike?

Attention is now shifting to the next DA revision cycle due in July 2026. Retail inflation rose to 3.48% in April, while food inflation climbed to 4.20%, increasing pressure on household budgets.

Rising prices of food, fuel and essential services have strengthened expectations of another revision. Although no official announcement has been made, employee unions and pensioners are increasingly hoping for a 2-3 percentage point DA hike in the next review. The final decision will depend on inflation trends and AICPI data in the coming months.

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