# Indian States Align Dearness Allowance to 63% Following Federal Pay Adjustments State governments implement retroactive salary hikes to offset inflation for millions of public employees. - **Source:** [mint - money](https://www.livemint.com/rss/money) - **Published:** 2026-11-08 - **Topic:** [politics](https://brifing.si/c/politics) - **Original article:** - **On Brifing:** https://brifing.si/s/d1dcbaf8-76db-495a-8943-144924de8da8 ## Synchronized Salary Adjustments Uttarakhand and Uttar Pradesh have raised the Dearness Allowance (DA) for state employees to 63% of basic pay. This adjustment, effective from July 1, 2026, mirrors the federal government's recent 3% increase. The policy aims to maintain parity between state-level staff and central government employees under the 7th Pay Commission. ## Broad Beneficiary Coverage The salary revisions extend beyond standard government employees to include personnel in aided educational institutions, technical colleges, and local urban bodies. Furthermore, staff drawing salaries under University Grants Commission (UGC) scales are eligible. This wide-reaching policy ensures that various public sector segments receive protection against the rising cost of living. ## Retroactive Payment Mechanisms Employees will receive arrears covering the period from July 1 to October 31, 2026. While Uttarakhand plans to distribute these funds in cash, Uttar Pradesh has implemented a structured deposit system. These payments are scheduled to coincide with regular November salary disbursements, providing immediate financial relief during the festive season. ## Uttar Pradesh Pension Protocols Uttar Pradesh has mandated specific investment rules for arrears based on pension schemes. General Provident Fund members will see funds locked until November 2027. Meanwhile, National Pension System participants will have 10% of arrears deposited into Tier-1 accounts, supplemented by a 14% government contribution to bolster long-term retirement savings. ## Retirement and Cash Provisions Special exemptions exist for retired personnel or those nearing retirement in Uttar Pradesh. Individuals whose service ended before the order, or who retire within six months, receive their full arrears in cash. This ensures that those exiting the workforce are not subject to long-term investment lock-in periods for their benefits. ## National Inflation Mitigation The Dearness Allowance serves as a critical mechanism to mitigate inflation's impact on purchasing power. By utilizing the All-India Consumer Price Index, the government revises these rates twice annually. This systemic approach helps public sector workers manage the rising prices of essential goods and services throughout the fiscal year. ## Widespread State Participation The trend of increasing DA is not limited to Uttarakhand and Uttar Pradesh. Himachal Pradesh recently enacted a 5% hike, while states like Punjab, Rajasthan, and Gujarat implemented 3% increases. These collective actions reflect a nationwide effort by state governments to align compensation with federal standards ahead of Diwali celebrations. ## Fiscal Policy Implications These combined state-level adjustments represent a significant increase in public expenditure, totaling over ₹10,016 crore across various regions. As governments balance festive relief with fiscal responsibility, the focus remains on maintaining employee morale. Observers should monitor future budget allocations to see how these recurring salary hikes impact long-term state deficits. ## Sources covering this story - [mint - money — Uttarakhand Increases Dearness Allowance to 63% for State Employees](https://www.livemint.com/money/da-hike-uttarakhand-increase-dearness-allowance-3-pc-to-63-pc-state-employees-pensioners-effect-1-july-2026-arrears-pay-11794103712472.html) - [NDTV – India — Uttar Pradesh Increases Dearness Allowance by 5% for State Employees](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._