In a significant move ahead of the festive season, Uttar Pradesh Chief Minister Yogi Adityanath announced a 3 percent increase in dearness allowance and dearness relief for state government employees and pensioners on Friday. The decision will benefit approximately 28 lakh workers and retired personnel across the state.
The revised rates will see the dearness allowance increase from 55 percent to 58 percent, effective from July 1, 2025. The enhanced payments will begin this month, with employees receiving the increased amount in cash. This announcement comes as a festive bonus, bringing financial relief to lakhs of families during the Diwali celebrations.
Announcing the decision on social media platform X, the Chief Minister emphasized the welfare aspect of this move. He stated that the increased allowance would serve as a catalyst for improving the standard of living while lighting the lamp of satisfaction, security, and prosperity in the lives of dedicated workers and pensioners during the great festival of Deepavali.
The state government will bear a substantial additional financial burden to implement this decision. Until March 2026, the total additional expenditure is estimated at Rs 1,960 crore. Breaking down the immediate impact, the government will disburse Rs 795 crore as extra cash outgo in November 2025 alone. Additionally, Rs 185 crore will be credited to the General Provident Fund accounts of employees who continue under the Old Pension Scheme.
The payment of arrears for the three-month period between July and September 2025 will require an additional Rs 550 crore. From December 2025 onwards, the state exchequer will incur an average monthly expenditure of Rs 245 crore to sustain the increased allowance rates.
Chief Minister Adityanath has directed officials to ensure that all eligible employees and pensioners receive the enhanced dearness allowance and dearness relief benefits promptly. The directive underscores the government's commitment to providing festive season relief to its workforce without delays in implementation.
The move aligns with similar decisions taken by other state governments. Earlier, Odisha also announced a 3 percent increase in dearness allowance for state government employees, raising it from 55 percent to 58 percent. That decision, also implemented retrospectively from July 1, 2025, benefits approximately 8.5 lakh government employees and pensioners in Odisha. The dearness relief for pensioners in that state was similarly increased by three percent.
Dearness allowance is a cost-of-living adjustment paid to government employees and pensioners to offset the impact of inflation. The allowance is revised periodically based on inflation indices to help maintain the purchasing power of salaries and pensions. This latest revision reflects the government's recognition of rising living costs and its attempt to provide relief to its employees during the festive period.
The announcement is expected to boost consumer spending during the Diwali season, potentially providing a stimulus to local economies across Uttar Pradesh. With nearly three million beneficiaries receiving enhanced payments, the injection of additional funds into household budgets could have multiplier effects on retail and service sectors.
The Uttar Pradesh government's decision demonstrates its focus on employee welfare while managing the state's fiscal responsibilities during a period of economic challenges and inflationary pressures.
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