DA Hike: Good news for bank employees. The government has raised the dearness allowance (DA) starting May 1, 2026. This new DA will be in effect for the quarter spanning from May to July 2026. Although this increase may not seem substantial, it will directly influence employees’ monthly pay.
DA has gone up from 25% to 25.70%
This time, the DA has been adjusted from 25% to 25.70%, marking a total rise of 0.70%. This adjustment is based on the Consumer Price Index (CPI) for the first quarter of 2026. Since DA is calculated on the basic salary, even a minor change can impact the overall salary.
How will this affect salaries?
The DA increase will boost the in-hand salary of employees by a few hundred rupees, potentially reaching around Rs 1,000, depending on their basic salary and pay scale.
Stage 10 (Scale I):
Basic Rs 67,160 → Increase of about Rs 600/month
Stage 15 (Scale I):
Basic Rs 80,560 → Increase of approximately Rs 719/month
Stage 30 (Scale II-III):
Basic Rs 69,840 → Increase of roughly Rs 633/month
Stage 47 (Scale II-III):
Basic Rs 1,17,200 → Increase of around Rs 1,058/month
In other words, as salaries rise, the benefits of DA also increase.
Why is this increase significant?
Even though a 0.70% increase might appear minor, it offers some relief to employees during inflationary periods. Regular adjustments to DA help ensure that salaries keep pace with inflation.
Comparison with Central Government employees:
Recently, the central government raised the DA for its employees from 58% to 60%, which is a 2% increase. In comparison, the DA increase for bank employees is lower, but it follows a different industry-specific formula.
What can we anticipate next?
DA is reviewed quarterly based on CPI, so further adjustments may occur in the upcoming months depending on inflation trends. Overall, bank employees will see a modest yet meaningful salary increase this time. While the amount may not be large, consistent DA increases provide considerable relief over time.
Meanwhile, The Union Cabinet has approved a two percent increase in dearness allowance for central government employees, pensioners, and employees. This decision will result in an increase in their DA.
Total dearness allowance increased to 60 percent
Following this government decision, the total dearness allowance for employees has now increased from 58% to 60%. This increase will directly benefit approximately 5 million government employees and over 6.5 million pensioners, increasing their monthly salaries and pensions.
How much will the salary increase now?
It should be noted that if a central government employee’s base pay is ₹36,500, then at 60%, their DA will now be ₹21,900. Importantly, employees will also receive arrears from January. The new rule will be effective from January 1, 2026. This means that employees will not only receive the next month’s increased salary, but also the arrears for the previous three months—January, February, and March—will be paid in one lump sum.
