Gujarat Raises Dearness Allowance to 63% for 8.82 Lakh Workers

More than 8.82 lakh employees and pensioners in Gujarat will receive a 3 percentage point increase in Dearness Allowance, after the state Cabinet approved the hike ahead of Diwali. The decision raises DA from 60% to 63% for all staff covered under the 7th Pay Commission.

The increase applies to serving state government employees, Panchayat service employees and pensioners. According to government figures, roughly 4 lakh serving employees and 4.82 lakh pensioners will benefit. The move answers long-standing demands and repeated representations from government employee unions.

What changes for payroll?

For an employee drawing a basic salary of ₹30,000, monthly DA rises from ₹18,000 at the 60% rate to ₹18,900 at 63%. That is an additional ₹900 each month. Payroll teams across state departments and Panchayat bodies will need to recalculate allowance components once the rate takes effect.

The government is expected to issue an official circular shortly. That circular will detail the implementation date and other relevant provisions following the Cabinet's decision. Until it appears, the effective date remains unconfirmed, and finance departments cannot finalize revised salary structures.

How did the rate reach 63%?

This is the second DA increase in a short window. In May 2026, the state government raised DA by 2 percentage points, moving it from 58% to 60%. The fresh 3-point hike, decided on November 3, 2026, lifts the rate to 63%.

The timing is deliberate. The Cabinet took the decision days before Diwali, one of the most significant festivals in the state's calendar. Employee unions had pressed the case for relief amid rising living costs, and the state framed the increase as festive-season support for its workforce.

What about the holiday swap?

The Cabinet paired the allowance hike with a scheduling change. November 9 is now a public holiday for government offices. To compensate for the additional day off, government offices will remain open and function as usual on Saturday, December 12.

The swap keeps the total number of working days constant. It also gives HR and administrative teams a fixed date to plan around. Attendance systems, leave registers and staffing rosters for both dates will require adjustment in every state office.

Who gains most?

The beneficiary base splits almost evenly between current staff and retirees. Approximately 4 lakh serving employees will see the increase in their monthly payslips. Another 4.82 lakh pensioners will receive the higher DA component in their pension payments, a group that often depends on inflation-linked adjustments as a primary shield against rising prices.

For pension disbursement offices, the change means recalculating payments for a population larger than the serving workforce itself. The forthcoming circular is expected to clarify whether arrears apply and from which month the new rate runs.

What happens next?

Attention now shifts to the official circular. Its implementation date, arrearity provisions and scope details will determine how quickly the 63% rate reaches payslips and pension accounts across Gujarat. Employee unions, having secured this round, are likely to track the next central DA revision as a benchmark for future state demands.