The Kerala government has sanctioned a 10% hike in Dearness Allowance (DA) for its employees and Dearness Relief (DR) for pensioners, offering additional financial support amid rising living costs. The revision aims to maintain income stability for public servants and retirees while aligning compensation with inflation trends.
The enhanced rates will come into effect from 2026 and will be reflected in upcoming salary and pension disbursements.
DA and DR Raised from 25% to 35%
Through a government order issued on 20 February 2026, the state administration approved an increase in both DA and DR from 25% to 35%. The move is intended to offset the impact of cost-of-living pressures faced by government personnel and pension beneficiaries.
Dearness Allowance and Dearness Relief are periodic adjustments linked to inflation, designed to preserve purchasing power for serving employees and retired individuals dependent on pensions.
Broad Coverage Across Beneficiary Categories
The revised rates will apply to a wide range of beneficiaries associated with state-funded institutions. Eligible recipients include:
- State government employees
- School teachers and aided educational institution staff
- Employees of private colleges and polytechnics receiving government assistance
- Local self-government body staff
- Contingent employees
- Pensioners and family pensioners
- Ex gratia beneficiaries
Additionally, part-time teachers, part-time contingent staff, and re-employed pensioners will also benefit. The revised allowance will be calculated based on the existing pay or pension drawn by the individual.
Applicability Under Pre-Revised Pay Structures
Employees and pensioners who continue under earlier pay revision frameworks will also receive updated DA and DR benefits. The applicable percentage will vary according to the respective pay revision order under which they are covered.
This ensures parity and continuity for individuals who have not yet transitioned to newer pay structures, maintaining uniformity in inflation-linked compensation across different salary frameworks.
Implementation Timeline
The enhanced Dearness Allowance will be included in March 2026 salaries, which are scheduled for disbursement in April 2026. Likewise, pensioners will receive the revised Dearness Relief component along with their April 2026 pension payments.
The government has indicated that detailed instructions regarding arrear payments will be issued separately, suggesting that further administrative clarifications may follow.
Extension to PSUs and Autonomous Bodies
Public sector undertakings (PSUs), statutory bodies, autonomous institutions, and grant-in-aid organisations that follow the state DA and DR pattern may adopt the revised rates, subject to financial viability.
Entities capable of meeting the additional expenditure independently may implement the revision directly. However, organisations heavily reliant on government grants for salary and pension payments will require prior approval before adopting the increased rates. Certain bodies instructed to issue independent allowance orders will continue to operate under existing guidelines.
Objective Behind the Revision
The allowance revision reflects the state government’s effort to maintain financial stability for employees and retirees amid inflationary pressures. By extending the hike across multiple employment and pension categories, the administration aims to ensure consistency and fairness in compensation adjustments.
The decision underscores the state’s commitment to supporting public sector personnel while maintaining administrative uniformity across government-linked institutions.
Summary
The Kerala government has approved a 10% increase in Dearness Allowance and Dearness Relief, raising both from 25% to 35%. The revision will benefit government employees, teachers, pensioners, and various state-supported institution staff. The updated rates will be implemented in March 2026 salaries and April 2026 pensions, with further instructions on arrears to follow. The move is aimed at addressing rising living costs while maintaining compensation parity across pay structures.
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