Kamal Ghorui
In a move that will benefit thousands of state employees, the Madhya Pradesh government has decided to increase the dearness allowance (DA) to 58%, aligning it with the rate currently given to central government employees.The revised allowance will be applicable from April 2026 and will be paid with the May salary. The decision also covers pending dues from July 2025 to March 2026, which will be cleared in instalments, according to an announcement made by Chief Minister Mohan Yadav.“The arrears amount from July 2025 to March 2026 will be paid in 6 equal instalments starting from May 2026. Pensioners will also receive a 58% dearness relief in their pension from January to February 2026,” Yadav said.Dearness allowance plays a key role in government salary structures as it helps offset the impact of inflation and supports employees in maintaining their purchasing power as the cost of living rises.
Kerala government also raised DA recently
Last month, the Kerala government approved a 10% increase in DA and dearness relief (DR) for employees and pensioners respectively, raising both from 25% to 35%.The decision was notified through an official government order on February 20, 2026, providing financial relief to government employees and pensioners.
FNPO seeks DA merger with basic pay before 8th Pay Commission
Meanwhile, the Federation of National Postal Organisations (FNPO) has urged the 8th Pay Commission to consider merging 50% DA with basic pay and granting interim relief to central government employees and pensioners from January 1, 2026.In a letter dated February 27, 2026 to the 8th Pay Commission chairperson Justice Ranjana Prakash Desai, FNPO secretary general Sivaji Vasireddy said:“In the light of the prevailing inflationary conditions and the erosion of real wages, my federation earnestly request the Hon’ble commission to recommend to the government the merger of 50% dearness allowance with basic pay/pension with effect from January 1, 2026, as a measure of interim relief. This measure would provide immediate financial relief, restore partial purchasing power and ensure economic dignity to lakhs of employees and pensioners across the country.“
What is dearness allowance?
Dearness allowance (DA) is a cost-of-living adjustment provided to government employees and pensioners. It is designed to offset the impact of inflation on salaries.The government typically revises DA twice every year — in January and July. The allowance is calculated as a percentage of an employee’s basic pay and is based on the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW).
How a 3% DA hike can affect salaries
If an employee’s basic salary is Rs 40,000, a 3% increase in DA would result in an additional Rs 1,200 per month.This calculation applies only to the basic pay component of the salary and does not include other allowances such as house rent allowance (HRA) or travel allowance (TA).Similarly, the impact of a 3% DA hike on different salary levels would be as follows:
