Kerala DA hike: Which employees and pensioners are eligible for increased dearness allowance and who is not? Explained

Kerala on 17 October announced a 2% hike in dearness allowance and dearness relief for state government employees and pensioners, raising it from 35% of basic pay to 37%, with effect from 1 January 2026, PTI reported.

The enhanced DA will be paid along with the October salary, disbursed in November, and the revised DR will be paid with the November 2026 pension, according to an order issued by the state Finance Department, it added.

The latest revision follows an earlier increase in DA and DR from 25% to 35% in February 2026 and comes as government employees and pensioners sought much-needed relief amid soaring inflation.

The order added that local governments will meet the additional expenditure from their own funds. The state government also said a separate order will be issued on arrears with effect from 1 January 2026.

Today, we explain which Kerala state government employees and pensioners are eligible for the increased DA and DR, and who are excluded, and why.

Kerala DA hike: Who is eligible and who is not?

• Who is eligible for Kerala DA and DR hike?

The hike applies to state government employees, teachers, staff of aided schools, private colleges and polytechnics, full-time contingent employees and employees of local governments.

It also covers state service pensioners, family pensioners, ex-gratia pensioners and ex-gratia family pensioners.

The enhanced DA will also be applicable to part-time teachers, part-time contingent employees, and re-employed pensioners, based on the pay they draw.

• Who gets DA, DR hike based on specific conditions?

According to the order, employees and pensioners of state public sector undertakings (PSUs), statutory corporations, autonomous bodies, boards, and grant-in-aid institutions following the state DA/DR pattern are also eligible for the enhanced rates, subject to specified conditions.

“Such organisations can release the revised rates based on a decision by their respective governing bodies, taking into account their ability to meet the additional expenditure,” it said.

Organisations unable to meet the expense from their own resources must obtain prior government approval, except for those in which more than 90% of salary or pension expenditure is covered by government grants.

• Who is not eligible for enhanced DA, DR?

The enhancement does not automatically apply to organisations such as the Kerala State Electricity Board (KSEB) and the Kerala State Road Transport Corporation (KSRTC).

This is because these organisations have been instructed to issue their own separate DA and DR orders, the report added.