DA hike for central government employees: Can government announce dearness allowance increase on Wednesday?

In the festive season, when Diwali is around, more than 55 lakh central government employees have been waiting for a dearness allowance (DA) hike announcement. As the government is set to hold its weekly cabinet meeting on Wednesday (October 28, 2026), employees’ long wait can be over.

Can the central government announce DA hike on Wednesday?

If the government holds its weekly cabinet meeting tomorrow (Wednesday), it is likely to announce the DA hike.


Manjeet Singh Patel, president, All India New Pension Scheme Employees’ Association, told ET Wealth Online that since it’s a big announcement also for the government, it can make it after its scheduled meeting on Wednesday.

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Employees and pensioners were waiting for the announcement last week as well, but the government didn’t hold its weekly cabinet meeting on Wednesday (October 22), a day after Dussehra.

Long wait but no DA hike announcement

The DA hike will be calculated from July 2026. So, when the Labour Bureau released the retail index reading for June at July-end, expectations were high that the government would announce it in September, days ahead of Dussehra. But the government didn’t do so.

Expectations were also high that the DA hike announcement would come after the first weekly cabinet meeting on October 6, but employees were left disappointed.

Many experts believed that the government wouldn’t delay it beyond the second weekly cabinet meeting of the month on October 14.

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However, the government came up with a big announcement of the performance-linked bonus for Railway employees but didn’t say anything about the DA hike.

On October 16, the government also announced the non-performance-linked bonus (non-PLB) for central non-gazetted government employees but skipped the DA announcement.

Employees were expecting that with bonuses already declared, the government would announce the DA hike after the cabinet meeting on Wednesday (October 21). But they were again left disappointed as the government didn’t hold the weekly meeting.

DA rate applicability

Patel says that the DA rate will be applicable for the July-December 2026 period. If the government announces it this month, employees will get arrears for July-October along with their salary at the end of November, says Patel. This is because pay is calculated from the 15th of one month to the 15th of the next month.

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What can be the DA hike: 3% or 4%?

For DA calculation, the average retail inflation of July 2025-June 2026 will be considered. Applying the average inflation to the DA calculation formula, the estimated DA hike can be 3 percentage points. This means that the current DA rate can go up from 60% to 63%.

How DA impacts the salary of a central government employee

Employees get the DA based on their basic pay. When the DA increases, their gross salary also increases. Another salary component attached to the DA is the transport allowance (TPTA), which also increases with the DA hike.

Take the example of a Level 8 employee residing in a higher TPTA city such as New Delhi. Their starting basic salary is Rs 47,600, and the TPTA allowance is Rs 3,200. If the DA rises from 60% to 63%, there will be an increase of approximately Rs 1,428 a month in their DA.

However, their overall transport allowance will also increase from Rs 5,760 to Rs 5,868, a Rs 108 increase.