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From government corridors to bank branches, the only hot discussion these days is Dearness Allowance (DA). Recently, the Central Government increased the DA of more than 50 lakh of its employees from 58 percent to 60 percent, due to which there is a wave of happiness in the government camp. But as soon as a nominal increase of 0.70% was announced for bank employees, questions of ‘discrimination’ started being raised from social media to union meetings. At first glance, this difference of 2% versus 0.7% may seem huge and biased, but the truth behind it lies in the complex calculations of the figures.

Same index, then why is there so much difference in the figures?

The surprising thing is that whether it is a bank employee or a central employee, the dearness allowance of both is decided on the same basis ‘Consumer Price Index for Industrial Workers’ (CPI-IW). That is, the figures of rising prices in the market released by the Labor Ministry become the basis for both. The real game is in the way and time frame of using this data. According to experts, while the DA of government employees is reviewed twice a year (every six months), the DA of bank employees is changed every three months.

three month vs six month math

DA of bank employees has increased from 25% to 25.70% for the quarter May to July 2026. This increase of 0.70% only reflects the inflation of the last quarter i.e. three months. At the same time, the 2% increase given to central employees is based on the average and long-term basis of the last six months. Understand it in simple words, bank employees get a quick increase in their salary in small installments, whereas government employees get a big ‘jump’ after a wait of six months.

Big impact of rules and agreements

The rules of salary and allowances are completely different for both the classes. While government employees are bound by the framework of the Central Pay Commission, the salaries and allowances of bank employees depend on the ‘Bipartite Settlements’ made between the Indian Banks Association (IBA) and the unions. In the banking sector, there is a facility to adjust DA according to the market conditions every three months, so that the employees do not feel the impact of inflation immediately.

Which system is best for employees?

Now the question arises that what is the benefit? The biggest plus point of the bank employees’ system is that they get the benefit of rising inflation immediately, they do not have to wait for the budget to deteriorate for six months. On the other hand, government employees get a large lump sum amount, which looks attractive in terms of future savings and arrears. Ultimately, this difference of 0.70% and 2% is not the result of any discrimination, but two different scales of measuring inflation.