Ahead of Diwali, the Union government has announced a 30-day ad hoc bonus for 2025-26 and a 3-percentage-point increase in dearness allowance (DA) for its employees. DA now goes up from 60% to 63% of basic pay. According to Hindustan Times, employee representatives say the benefits are not enough, especially because the bonus calculation ceiling has stayed at ₹7,000 a month for the 11th year in a row.
Key points
- A 30-day ad hoc bonus for 2025-26 was sanctioned on October 15, with a maximum payout of ₹6,908.
- DA for employees and dearness relief (DR) for pensioners were raised by 3 percentage points, to 63%.
- The DA and DR revision will cost the exchequer ₹10,016.10 crore a year, according to the finance ministry.
- Employee representatives want a higher bonus ceiling and a merger of DA with basic pay.
Who gets the bonus and DA hike
The finance ministry's expenditure department sanctioned the bonus, which is not linked to productivity, on October 15. It equals 30 days' emoluments. The maximum amount works out to ₹6,908, based on the monthly ceiling of ₹7,000.
The bonus applies to Group C employees and non-gazetted Group B employees who are not covered by any productivity-linked bonus scheme. It also covers eligible personnel of the Central Armed Police Forces and the armed forces. Employees of Union Territory administrations that follow the Union government's pay structure are included if no other bonus scheme covers them.
To qualify, an employee must have been in service on March 31, 2026, and must have completed at least six months of continuous service during 2025-26. Those with shorter service will get the bonus on a pro-rata basis.
On October 28, the Union Cabinet approved the DA increase for employees and the DR increase for pensioners. It takes effect retrospectively from July 1, 2026, so employees and pensioners will receive arrears. The revision is expected to benefit about 4.85 million employees and 6.87 million pensioners. DA is revised twice a year to offset rising prices and is based on the All-India Consumer Price Index for Industrial Workers.
What employee representatives say
All India NPS Employees Federation president Manjeet Singh Patel said the government has kept up its 11-year pattern by releasing the same ₹6,908 as the 30-day bonus. He said the government gave only a 3% DA rise just before Diwali, expecting that it would make employees' festival better.
Patel said the government should have merged 50% DA with basic pay once the allowance reached that level, instead of keeping it as a separate component. He said employees already face a loss of around 6-7% because this was not done. He urged the government to merge 50% of the existing DA into basic salary and to calculate the remaining 13% as DA on the revised basic pay.
Expert view and what comes next
Madras School of Economics director NR Bhanumurthy said both announcements are part of the government's regular practice and come when employees usually spend more during the festive season. He called them very timely and useful for government staff.
On the demands for a higher bonus ceiling and DA merger, Bhanumurthy said these could be taken up by the Eighth Central Pay Commission, which is currently functioning. He said such issues cannot be handled case by case. He added that the government would need to examine the rationale and basis for the bonus before raising the ceiling. The commission is expected to look at broader questions on salaries, allowances and service conditions of central government staff.
