Chief Minister N Chandrababu Naidu announced a series of welfare measures for state government employees on October 18, 2025, as a Diwali bonanza, including the release of one instalment of Dearness Allowance (DA) effective November 1, amid ongoing efforts to address financial strains inherited from the previous regime. In an official statement, Naidu highlighted the government's commitment to timely benefits despite fiscal hurdles, estimating a monthly expenditure of Rs 160 crore for the DA payout. This gesture, aimed at boosting morale during the Festival of Lights, comes as Andhra Pradesh grapples with a depleted treasury following the Telugu Desam Party's (TDP) return to power in June 2024, with Naidu emphasising transparency and efficiency in disbursals.
The package encompasses multiple initiatives tailored to employee concerns. Naidu pledged to clear one tranche of the police department's accumulated earned leave encashments, disbursing Rs 105 crore in two equal instalments. He also committed to overhauling the health insurance scheme for state workers within 60 days, enhancing coverage and accessibility. Additionally, childcareleave has been extended to 180 days, available up to retirement, offering greater flexibility for working parents.
In further nods to labour demands, property taxes on buildings owned by government employee association offices will be waived, and long-pending promotions for Road Transport Corporation (RTC) staff have been finalised as a festive gift. Naidu assured that certain job designations would be redesignated with updated nomenclature to reflect evolving roles, urging unions to trust his handling of the Pay Revision Commission (PRC) matter, with an announcement imminent.
Naidu underscored the administration's proactive fiscal management, noting the release of Rs 15,921 crore in employee dues and the uploading of Rs 23,556 crore in pending payments from the YSR Congress Party (YSRCP) era into the system. Despite these outflows, he pointed out that 91% of the state's Rs 51,452 crore annual budget—disproportionately high compared to neighbours like Telangana (38%), Tamil Nadu (42%), and Karnataka (39%)—goes toward establishments, including salaries disbursed on the first of each month. To streamline resolutions, a Cabinet sub-committee will address ongoing employee issues, fostering dialogue over discord. This approach contrasts with the YSRCP's tenure, marked by delays and allegations of mismanagement that left a Rs 10 lakh crore debt burden, per state finance department estimates.
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The announcements have elicited mixed responses from employee unions, with some praising the DA hike—aligning with central government trends—as a timely relief amid inflation, while others seek more comprehensive PRC reforms to align salaries with rising living costs. As Diwali approaches on October 20, symbolising prosperity and renewal, Naidu's measures reflect TDP's voter-centric strategy, blending immediate gratification with long-term reforms.
Critics from the opposition YSRCP decry it as "tokenism", but supporters view it as a step toward restoring investor confidence and economic stability. With the state eyeing infrastructure revival through initiatives like the Polavaram project, these employee perks could stabilise the workforce, pivotal for Andhra Pradesh's ambitions as a growth engine in southern India.
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