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In a festive gesture ahead of Diwali, the Uttar Pradesh government has announced a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for over 28 lakh state employees and pensioners. The increase raises the DA rate from 55% to 58%, effective July 1, 2025, and is being hailed as a “Diwali gift” from Chief Minister Yogi Adityanath to government staff and retirees. The decision is expected to bring direct financial relief to around 16.35 lakh active employees and 11.52 lakh pensioners across the state. The move comes at a time when rising prices and inflation have been impacting household budgets, especially during the festive season when spending typically spikes. The Chief Minister said the revision reflects the government’s commitment to supporting those who serve the state and ensuring that retired workers are not left behind.
He added that the government is sensitive to the financial pressures people face and wants to spread festive cheer by putting more money in their hands before Diwali. This increase aligns Uttar Pradesh with the Central Government’s DA rate, ensuring parity between state and central employees.
The revised DA will apply from July 2025, and the government has also confirmed that arrears for July, August, and September will be paid in cash starting later this month. Pensioners will receive the revised Dearness Relief (DR) with their upcoming pension disbursements. For many, this hike will come as a much-needed boost ahead of the year’s biggest festival.
However, the hike also carries a significant cost to the state exchequer. Official estimates suggest the government will bear an additional financial burden of around ₹1,960 crore for the current fiscal year. Of this, nearly ₹795 crore will be paid in cash to employees, while another ₹185 crore will be credited to General Provident Fund (GPF) accounts under the old pension scheme. Starting from December 2025, the government will spend roughly ₹245 crore every month to sustain the increased allowance.
Economists say the move, while generous, will add pressure to the state’s finances, but it could also stimulate spending and improve morale among government employees. “A DA hike before Diwali is not only symbolic but also practical. It uplifts morale, boosts consumer confidence, and strengthens the local economy during the festival season,” said Lucknow-based economic analyst Aruna Mehta.
The decision mirrors a broader national trend, as several other states have announced DA increases in the run-up to Diwali following the central government’s move. The gesture is both economically meaningful and politically timely, allowing the UP government to strengthen its bond with employees and retirees, a group that forms a large and influential section of the state’s middle class.
For employees, the 3% rise translates into a modest but welcome increase in monthly take-home pay. For instance, someone earning a basic salary of ₹30,000 will now receive ₹870 more in DA each month. For pensioners, the relief will also help cushion the effects of inflation on fixed incomes.
As Uttar Pradesh gears up for the festival of lights, this announcement has spread a wave of positivity among families dependent on government salaries and pensions. For many, it’s more than a financial adjustment it’s a gesture of acknowledgment for their continued contribution to the state’s functioning.
The Yogi Adityanath government has often used festive occasions to announce welfare measures or bonuses, and this latest move continues that pattern. With over 28 lakh beneficiaries, the impact of this decision is expected to ripple across the state economy, driving consumer spending in markets just ahead of the Diwali rush.
While the fiscal cost may challenge the state’s budget management, the timing ensures that it delivers both emotional and economic value a thoughtful combination of welfare and celebration. As lamps light up across Uttar Pradesh this Diwali, the government’s decision to raise DA by 3% has illuminated the faces of thousands of families, a reminder that even in tight fiscal times, festive goodwill can still shine bright.
