# Uttar Pradesh Increases Dearness Allowance by 5% for State Employees The government raises dearness allowance to 63% ahead of the Diwali festive season. - **Source:** [NDTV – India](https://www.ndtv.com/india) - **Published:** 2026-11-07 - **Topic:** [politics](https://brifing.si/c/politics) - **Original article:** - **On Brifing:** https://brifing.si/s/b31e210e-737a-41ac-ad8c-04e0db75689d ## Dearness Allowance Adjustment The Uttar Pradesh government officially increased the dearness allowance for state employees by 5 percent. This adjustment raises the total allowance from 58 percent to 63 percent. The policy change serves as a financial measure intended to provide relief to public sector workers immediately preceding the upcoming Diwali festive season celebrations. ## Scope of Beneficiaries This policy update covers a broad range of public sector personnel across the state. Eligible recipients include regular state government employees, full-time staff at aided educational and technical institutions, and urban local body workers. Additionally, those drawing salaries under the University Grants Commission pay scale are included in this specific financial benefit. ## Implementation and Payment Schedule The revised dearness allowance rate is effective retroactively from July 1. Employees will receive the increased allowance starting with their regular November salary payments. The government order, issued this past Saturday, establishes the formal framework for these disbursements, ensuring that the administrative process aligns with the state's current fiscal payroll management systems. ## Handling of Retroactive Arrears Provisions have been established for arrears accumulated between July 1 and October 31. The method of payment for these funds depends on the employee's specific pension scheme. For those under the General Provident Fund, arrears will be deposited directly into their accounts, subject to income tax deductions and specific withdrawal limitations. ## National Pension System Contributions Employees covered by the National Pension System will see 10 percent of their arrears deposited into Tier-1 pension accounts. Simultaneously, the state government will contribute 14 percent of the arrears as the employer's share. This structure ensures that a portion of the retroactive payment is directed toward long-term retirement savings for staff. ## Investment of Remaining Arrears For National Pension System participants, the remaining 90 percent of arrears will be invested in Public Provident Fund accounts or National Savings Certificates. If National Savings Certificates are unavailable, the government will provide the remaining balance in cash. This multi-channel approach manages the liquidity impact of the retroactive salary adjustment on state finances. ## Provisions for Retiring Personnel The government has implemented specific rules for employees who have retired or are nearing retirement. Individuals whose service ended before the order, those retiring between July 1, 2026, and the order date, and those retiring within six months will receive their full arrears in cash, bypassing the standard long-term investment requirements. ## Economic Context and Impact The decision reflects the state's effort to support employees during the festive period. By increasing the allowance to 63 percent, the government aims to mitigate inflationary pressures on household budgets. This move impacts lakhs of state workers, representing a significant fiscal commitment by the Uttar Pradesh administration to its public workforce. ## Sources covering this story - https://www.ndtv.com/india-news/ahead-of-diwali-up-hikes-dearness-allowance-by-5-for-government-employees-12297474#publisher=newsstand — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._