To ease inflationary pressures and boost spending, several Indian states rolled out DA hikes for Diwali 2025. While many states followed the Central Government’s 3% increase, Karnataka stood out with the highest proportional DA hike ahead of the festival.
Before Diwali, Karnataka revised its DA by 2 percentage points: from 12.25% to 14.25%, effective July 1, 2025.
Although the increase in percentage points was smaller than some other states’ 3% rise, Karnataka’s lower base rate made this the largest proportional jump in DA among states.
The hike applies to both government employees and pensioners, offering much-needed relief amid rising living costs.
| State | DA Increase | Effective Date |
| Karnataka | 2% (from 12.25% → 14.25%) | July 1, 2025 |
| Uttar Pradesh | 3% (from 55% → 58%) | July 1, 2025 |
| Odisha | 3% (from 55% → 58%) | July 1, 2025 |
| Jharkhand, Uttarakhand, Himachal Pradesh | 3% (from 55% → 58%) | July 1, 2025 |
The Central Government had earlier raised DA by 3%, taking it from 46% to 49%. Most states followed this benchmark, adjusting their respective rates accordingly. However, state-level variations in DA base rates meant that percentage point increases didn’t always translate equally, making Karnataka’s 2% hike more significant in relative terms.
DA adjustments are directly linked to cost-of-living changes, reflecting inflation trends. They aim to protect the real income of government employees and pensioners. Festive season hikes, especially before Diwali, not only enhance morale but also stimulate local spending, contributing to short-term economic buoyancy.
Read more: Diwali 2025: When Are BSE and NSE Closed for the Festival of Lights?
While several states (including Uttar Pradesh, Odisha, and Uttarakhand) matched the Centre’s 3% DA hike, Karnataka’s increase from 12.25% to 14.25% stood out as the highest proportional DA hike before Diwali 2025.
This festive boost underscores the state’s commitment to cushioning its workforce against inflation, setting a strong example for others.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Oct 20, 2025, 7:58 AM IST
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