Every time the Centre announces a fresh dearness allowance (DA) instalment, a second wait begins in the state capitals, where lakhs of government employees and pensioners look to their own governments for the same relief. Families in these states keep checking news reports and official circulars, because the state DA rate is not decided on same day as the Centre's.
DA is paid on top of the basic pay, and dearness relief (DR) is paid on top of the pension. Both are meant to offset the rise in the cost of living. The DA rate announced by the Centre applies only to central government employees, and the matching DR rate applies only to central government pensioners. For the employees of a state government, the decision rests with that state, and many households are therefore waiting for it with some anxiety.
Who decides the state DA rate
In every state, the decision on DA is taken by the state cabinet, usually on the proposal of the finance department, most state governments look at the Centre's rate as a reference, but they are not bound to follow it.
As a result, there is a difference in timing from one state to another. Some governments announce the increase within a few weeks, while employees in other states wait for several months.
The effective date also differs. A state may declare the increase from the same date as the Centre, or it may fix a later date and the rate and the number of instalments can be different as well.
These choices depend on the state's revenue, its salary and pension commitments, and the political situation, particularly in the months before an election.
What the gap means in practice
When the state DA rate stays behind the Centre's, the monthly salary of a state employee remains lower than that of a central employee in a similar post. Pensioners in the same state also receive a lower pension amount for the period of the delay.
Households adjust their spending in the meantime, and local shops and service providers in smaller towns notice the difference when the increase finally reaches the bank accounts.
A few states match the Centre fully and on time.
Each state acts on its own finances and schedule, so the gap with the Centre can widen or narrow without notice.
