In a major relief for 9 lakh state government employees and pensioners, the Bihar government has approved a 2% increase in Dearness Allowance (DA), taking it from 58% to 60%, according to media reports.

The decision was cleared in the first meeting of the newly expanded Bihar Cabinet. The state Cabinet, led by Chief Minister Samrat Choudhary, gave approval to 18 agenda items, including the DA hike. Around 9 lakh state government employees and pensioners are expected to benefit directly from the DA hike.

The increase in DA means a higher monthly take-home salary for serving employees, while pensioners will see a corresponding rise in Dearness Relief (DR), offering some cushion against inflation.

DA is a cost-of-living adjustment paid to government employees to offset the impact of inflation. Since pensioners receive a similar inflation-linked benefit in the form of DR, any such revision typically benefits both groups.

A DA hike directly increases the gross salary of government employees because the allowance is calculated as a percentage of basic pay.

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For example:

If an employee’s basic pay is Rs 30,000:

At 58% DA: Rs 17,400

At 60% DA: Rs 18,000

Monthly increase: Rs 600

If basic pay is Rs 50,000:

At 58% DA: Rs 29,000

At 60% DA: Rs 30,000

Monthly increase: Rs 1,000

The exact increase will vary depending on the employee’s pay level.

Pensioners also gain

The benefit is not limited to serving employees. Pensioners receiving Dearness Relief linked to the same rate structure will also see an increase in monthly pension payouts, depending on their basic pension amount.

This is particularly relevant at a time when inflation continues to affect household budgets, especially healthcare and essential expenses for retirees.

How does this compare with the Centre’s recent DA hike?

Bihar’s move comes shortly after the Centre announced its own DA revision for central government employees.

Last month, the Union government approved a 2% increase in Dearness Allowance, raising it from 58% to 60% for central government employees and Dearness Relief for pensioners. That hike benefited nearly 1.2 crore central government employees and pensioners.

So, Bihar’s DA level at 60% is currently similar to the level maintained by the Centre, though DA structures can differ across governments depending on adoption timelines and pay commission formulas.