Union Government Announces Diwali Bonuses and DA Hike for Employees

The Union government has introduced a 30-day non-productivity-linked bonus and a 3-percentage-point rise in dearness allowance (DA) for central government staff ahead of Diwali. The DA increase, which brings the rate to 63% of basic pay, is effective retrospectively from July 1, 2026.

The bonus, capped at a maximum of ₹6,908, applies to eligible Group B and C non-gazetted employees, including those in the armed forces and Union Territory administrations. To qualify, staff must have been in service as of March 31, 2026, with at least six months of continuous employment during the 2025-26 fiscal year.

Employee representatives have expressed dissatisfaction with the measures, noting that the bonus ceiling has remained unchanged for 11 years. Critics argue that the government should have merged 50% of the DA into basic pay, claiming that current practices result in a financial loss for employees.

Economists suggest that while the timing of the announcement provides support during the festive season, structural changes to pay and bonus calculations are complex. These issues are expected to be addressed by the Eighth Central Pay Commission, which is currently evaluating service conditions and salary structures.