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).
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.
