The Kerala government announced a 2% increase in Dearness Allowance (DA) for state government employees and Dearness Relief (DR) for pensioners on October 17, according to a PTI report. The revision raises both rates from 35% to 37% of basic pay and is effective from January 1, 2026.
According to an order issued by the state Finance Department, the increased DA will be paid with the October salary, which is due for disbursement in November. Pensioners will receive the revised DR along with their November 2026 pension.
The latest revision follows an earlier increase in DA and DR from 25% to 35% in February 2026. The decision comes as employees and pensioners seek financial relief amid rising inflation.
The government has also clarified that local governments must cover the additional expenditure from their own funds. A separate order will be issued regarding the payment of arrears effective from January 1, 2026.
Kerala DA and DR Hike 2026: Who Is Eligible?
The revised rates cover several categories of state government employees and pensioners.
Eligible employees include state government staff, teachers, employees of aided schools, private colleges and polytechnics, full-time contingent employees, and employees of local governments.
The increase also covers state service pensioners, family pensioners, ex-gratia pensioners and ex-gratia family pensioners.
Part-time teachers, part-time contingent employees and re-employed pensioners are also covered, with the applicable increase determined by the pay they draw.
DA Hike for PSUs, Boards and Autonomous Bodies
Employees and pensioners associated with state public sector undertakings (PSUs), statutory corporations, autonomous bodies, boards and grant-in-aid institutions may also qualify for the enhanced DA and DR rates if their organisations follow the state’s DA/DR pattern.
However, the revised rates are subject to specific conditions. According to the government order, these organisations may implement the increase after a decision by their respective governing bodies, taking into account their capacity to bear the additional expenditure.
Organisations that cannot meet the extra cost from their own resources must obtain prior approval from the state government. This requirement does not apply to organisations where more than 90% of salary or pension expenditure is covered by government grants.
Which Employees and Pensioners Are Excluded?
The 2% increase does not automatically extend to employees and pensioners of every state-owned organisation.
The Kerala State Electricity Board (KSEB) and the Kerala State Road Transport Corporation (KSRTC) are among the organisations that must issue separate orders regarding DA and DR revisions.
Employees and pensioners associated with these organisations should therefore refer to the specific orders issued by their respective bodies to determine whether the enhanced rates apply to them.
Disclaimer: This article is based on information reported by PTI and details attributed to the Kerala Finance Department’s order. Eligibility, payment schedules and arrears may depend on the applicable government instructions and separate orders issued by individual organisations. Readers should consult official notifications or their respective departments for confirmation of their entitlements.