CHENNAI: Chief Minister C Joseph Vijay on Thursday announced a 2% hike in Dearness Allowance (DA) for State government employees and teachers with retrospective effect from January 1, 2026.

In a statement, the government said the Union government had increased Dearness Allowance for its employees from 58% to 60%, following which the State government also decided to revise the DA for its staff and teachers.

The government said around 16 lakh government employees, teachers, pensioners and family pensioners would benefit from the hike.

Officials said the DA increase would result in an additional annual expenditure of around Rs 1,230 crore for the State exchequer.

The statement added that the government had decided to bear the additional expenditure, considering the welfare of government employees, teachers, pensioners and family pensioners.