DA Hike: Central government employees are eagerly anticipating an increase in their dearness allowance (DA), which could potentially be announced by September or October. In the meantime, the Odisha government has sanctioned a 5% rise in DA for state government employees and retirees under the Odisha Revised Pay Scale (ORSP) Rules, 2008 (pre-amendment rules). This decision is expected to benefit various sectors such as government-aided educational institutions, universities, subordinate judicial officers, and contract employees, including teaching and non-teaching staff.
Details of the DA increase
The Odisha State Finance Department’s official notification disclosed that the revised DA, effective from January 1, 2026, has been raised from 257% to 262% of the basic and grade pay. Arrears for the period from January to June 2026 will be disbursed, with the adjustment for July salaries. The increase, endorsed by Chief Minister Mohan Charan Majhi’s administration, aligns with the central government’s DA hike and is tailored to the state’s financial objectives. Additionally, on May 15, Odisha announced a 2% DA increase for state government employees and retirees, elevating the DA from 58% to 60%, effective from January 1, and was disbursed with the May salary.
Expectations of central employees
Central government employees are eagerly awaiting the DA hike for the latter half of the year, with expectations ranging from 3% to 4%. Recent government figures indicate that retail inflation climbed to 4.38% in June 2026, with food inflation at 5.32%. The final adjustment will hinge on the All India Consumer Price Index for Industrial Workers (AICPI-IW) data for June 2026 and subsequent government approval.
The AICPI-IW was recorded at 149.1 in March 2026, 149.9 in April 2026, and 150.8 in May 2026, with a projected value of 151.7 for June 2026. If the growth trend mirrors that of May, the allowance could rise by 4%, potentially reaching 64%.
Several state governments have also increased DA to bring it at par with the central government. The latest addition is West Bengal, which increased DA by 20% from last month, taking it to 38% of the basic salary. Previously, Arunachal Pradesh, Assam, Tamil Nadu, and Uttar Pradesh approved a 2% increase, while Bihar implemented a 2% increase for employees under the 7th Pay Commission, 5% for employees under the 6th CPC, and 9% for employees under the 5th CPC.