Kerala raises dearness allowance from 35% to 37%, effective January 1, 2026
The state government has announced a two-point increase in DA and DR, which will benefit lakhs of employees and pensioners.
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The Kerala government has officially announced an increase in dearness allowance (DA) and dearness relief (DR) for government employees in the festive season. With the hike, employees' DA rises from 35% to 37%. The new order comes into effect from January 1, 2026. Lakhs of employees in the state are expected to get significant relief amid rising prices.
According to the order issued by the Finance Department, the enhanced DA will be paid to employees in November, along with their October salary. Pensioners will receive the revised DR with their November 2026 pension. DA was raised from 25% to 35% in February 2026.
Local self-government institutions will bear the additional expenditure from their own funds. The government will issue a separate order soon on the arrears accruing from January 1, 2026.
All regular employees and teachers of the Kerala government are covered. Employees of aided schools, private colleges and polytechnics will also receive the allowance. Full-time contract employees and employees working in local self-government institutions are included as well.
Pensioners of state service, family pensioners, ex gratia pensioners and ex gratia family pensioners will get the full benefit. Part-time teachers, part-time contract employees and re-employed pensioners will also be given the increased DA in proportion to their pay.
Employees and pensioners of public sector undertakings, statutory corporations, autonomous bodies, boards and aided institutions that follow the state's DA pattern have also been counted. For these institutions, however, implementation will depend on the decision of their governing boards and their financial position. Institutions that cannot bear the expenditure themselves will have to seek government permission. Institutions that meet more than 90% of their expenditure from government grants can implement it directly.
The increased DA will not apply automatically to some institutions, notably the Kerala State Electricity Board (KSEB) and the Kerala State Road Transport Corporation (KSRTC). They have been directed to issue separate DA and DR orders for their employees. Other states are also awaiting such a decision.
