Ahead of the Diwali festivities, the Union government announced a 30-day ad hoc bonus for 2025-26 and a 3-percentage-point increase in dearness allowance (DA), taking it from 60% to 63% of basic pay, for its employees, even as their representatives say the bonus remains inadequate. The government retained a calculation ceiling of ₹ 7,000 a month for the 11th consecutive year.
The bonus applies to Group C employees and non-gazetted Group B employees not covered by any productivity-linked bonus scheme. It is applicable to eligible personnel of the Central Armed Police Forces and armed forces, employees of Union Territory administrations that follow the Union government’s pay structure and are not covered by another bonus scheme. Employee representatives say the announcements fall short of their demands. He added that it is also very timely. “My feeling is that all these things would be transferred to the Eighth Pay Commission to address when they recommend their report. All these issues may be deliberated by the commission. He added that the government would need to examine the rationale and the basis for revising the bonus before increasing the ceiling.
On October 15, the finance ministry’s expenditure department sanctioned a non-productivity-linked bonus equivalent to 30 days’ emoluments for eligible central government employees for the accounting year 2025-26. The maximum payout works out to ₹ 6,908, based on the monthly calculation ceiling of ₹ 7,000. The DA and DR revision is expected to benefit around 4.85 million central government employees and 6.87 million pensioners. It will have an annual financial implication of ₹ 10,016.10 crore for the exchequer, according to the finance ministry. All India NPS Employees Federation president Manjeet Singh Patel said the government has maintained the 11-year-old record by releasing the same ₹ 6,908 as a 30-day bonus. Patel said the government should have merged 50% DA with basic pay when the allowance reached that level, instead of allowing it to continue as a separate component.
Because of the government’s decision not to merge the allowance with basic pay, he said employees were already facing a loss of around 6-7%.
“Similarly, just before Diwali, it has given only a 3% increase in dearness allowance, expecting that this will make employees’ Diwali better,” he said. Madras School of Economics director NR Bhanumurthy said the two announcements were part of the government’s regular practice and came when employees typically face higher spending during the festive season. “Certainly, it is very useful for government staff during the festival season,” he said. Bhanumurthy said demands for a higher bonus ceiling and the merger of DA with basic pay could be taken up by the Eighth Central Pay Commission, which is currently functioning. It cannot be a case-by-case basis,” he said.
