Lakhs of state government employees and pensioners have received a Diwali bonus of sorts. Gujarat, Uttarakhand and Arunachal Pradesh have raised the dearness allowance (DA) for their staff from 60% to 63% of basic pay, bringing it on par with the rate the Centre approved for its own employees last month. In all three states, the higher rate applies retrospectively from July 1, 2026.
The announcements came in the days just before the festival, with Arunachal Pradesh Chief Minister Pema Khandu making the latest announcement on November 6.
The Background: Centre Raised DA to 63%
On October 28, the Union Cabinet approved a 3-percentage-point increase in DA for central government employees and dearness relief (DR) for pensioners, taking it from 60% to 63% with effect from July 1, 2026. The decision covers about 48.54 lakh central employees and 68.71 lakh pensioners, at a combined annual cost of Rs 10,016.10 crore.
DA is revised twice a year to help employees cope with inflation. Most states follow the Centre's lead, though the timing of their announcements varies, and several choose the festival season to declare the hike.
State-Wise Details
Gujarat
The Gujarat government has increased DA from 60% to 63% for state employees, pensioners and other eligible beneficiaries. The revised rate applies from July 1, 2026, and arrears for the July to October period are to be paid along with the November disbursement.
Uttarakhand
Chief Minister Pushkar Singh Dhami approved the 3% hike, raising DA from 60% to 63% from July 1, 2026. The benefit extends to employees of local bodies, aided educational institutions, state universities and technical institutions, including staff on UGC pay scales. The difference for July 1 to October 31 will be paid in cash.
Arunachal Pradesh
Chief Minister Pema Khandu announced on November 6 that DA for employees and DR for pensioners and family pensioners will rise from 60% to 63% from July 1, 2026. The arrears for July to October will be credited along with the November salary and pension. The hike also covers All India Services officers and central government employees serving in the state on deputation.
Key Facts at a Glance
| Detail | Value |
|---|---|
| Old DA rate | 60% of basic pay |
| New DA rate | 63% of basic pay |
| Effective from | July 1, 2026 |
| States in this round | Gujarat, Uttarakhand, Arunachal Pradesh |
| Arrears period | July to October 2026 |
| Centre's approval | October 28, 2026 (60% to 63%) |
How Much More Will Employees Get?
DA is calculated as a percentage of basic pay, so the gain depends on your pay level. Here is a simple way to work it out:
- Find your basic pay. Check your latest salary slip for the basic pay figure (excluding allowances).
- Calculate old DA. Multiply basic pay by 0.60. On a basic of Rs 30,000, that is Rs 18,000.
- Calculate new DA. Multiply basic pay by 0.63. On Rs 30,000, that is Rs 18,900.
- Find the monthly gain. The difference, Rs 900 in this example, is your extra DA each month.
- Work out arrears. Multiply the monthly gain by four (July to October). In this example, that is Rs 3,600 before any deductions.
Other States Moving Too
The three states are not alone. Rajasthan and Tamil Nadu have also announced DA increases to 63% in recent days, while Karnataka has raised DA for employees under its 2024 revised pay scales from 15.75% to 18%. Karnataka's figure is not directly comparable because it is linked to a newer pay structure.
What It Means and What Comes Next
For households, the extra money and arrears arrive at a time of heavy festive spending, and economists generally see such payouts giving a small push to consumption. For state finances, the hike adds to the salary and pension bill, which is why some states stagger arrears or credit them to provident fund accounts.
The next DA revision, for the period starting January 2027, is expected to be decided by the Centre in the first half of next year based on inflation data. Employees in states that have not yet announced the July 2026 hike will be watching for orders in the coming weeks.
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