Bengaluru: The Karnataka government on Wednesday announced a hike in the dearness allowance (DA) for its employees and pensioners, raising it from 12.25 per cent to 14.25 per cent of their basic pay. The move, aimed at providing financial relief to state employees during the festive season, comes just days before Deepavali.
Order issued by finance department
According to the order issued by the state finance department, the revised DA will be applicable to all government employees and pensioners, including family pensioners, with effect from July 1, 2025. The increased allowance will be reflected in their upcoming salary and pension payments.
The hike of two percentage points follows the Union Government’s recent revision of DA for central government employees. The state government generally mirrors these revisions to maintain parity between central and state employees.
Second DA hike in current fiscal year
This marks the second DA increase in the ongoing financial year. In May, the government had raised the allowance from 10.75 per cent to 12.25 per cent. With the latest revision, the cumulative increase this year stands at 3.5 percentage points.
Officials noted that the additional financial burden on the state exchequer would run into several hundred crore rupees annually. However, the government said the move was necessary to offset rising living costs and support employees ahead of the festival season.
Relief for employees and pensioners
The decision has been widely welcomed by employee unions and pensioners’ associations. Many have described it as a timely relief, especially as consumer inflation continues to affect household budgets.
“The DA hike will help employees manage festive expenses better. The state’s timely action shows it values the welfare of its workforce,” said an official from the Karnataka State Government Employees’ Association.
Finance department officials added that the increase would also benefit pensioners and family pensioners, ensuring parity across all categories.
Implementation and payment schedule
As per the order, the arrears for the period between July and September will be credited to employees’ and pensioners’ accounts along with the November salary or pension. The government has directed treasury officials to ensure smooth implementation of the revised DA rates across all departments.
Fiscal implications and outlook
While the DA revision is a routine exercise tied to inflation, it also reflects the state’s improved fiscal capacity this year. Economists have noted that Karnataka’s tax collections and GST revenue have seen an upward trend, enabling the government to accommodate welfare-linked spending.
A senior finance department official said, “The DA revision is part of our commitment to keep employees’ real income stable despite inflationary pressures. The state has made room in the budget to manage this additional expenditure without affecting ongoing development projects.”
A festive boost before Deepavali
With Deepavali around the corner, the hike is expected to boost consumer spending in local markets. Traders and retailers across Bengaluru, Mysuru, and Hubballi anticipate a rise in demand as government employees receive arrears and higher pay.
The government has been under pressure to announce employee-friendly measures ahead of the festive season, especially amid ongoing discussions on implementing the 7th Pay Commission recommendations for certain state departments.
The move to increase DA ahead of the festival not only aligns with tradition but also helps inject liquidity into the economy, providing a minor yet meaningful boost to the state’s consumption-driven sectors.
Conclusion
The latest DA revision reaffirms the government’s approach to employee welfare and cost-of-living adjustments. With this hike, Karnataka’s employees and pensioners can expect some relief as they prepare for the festive season, even as the state balances welfare expenditure with fiscal prudence.