The Kerala government has approved a revision in Dearness Allowance (DA) and Dearness Relief (DR), offering additional financial support to state employees and pensioners.
The increase reflects efforts to address rising living costs while maintaining compensation alignment with inflation trends.
The revised rates will apply across several categories of beneficiaries and will be implemented through upcoming salary and pension disbursements, as per news reports.
The Kerala government has authorised a 10% increase in Dearness Allowance for employees and Dearness Relief for pensioners, raising both components from 25% to 35%.
The decision was formalised through a government order issued on 20 February 2026. The revision is intended to adjust compensation in response to cost of living changes affecting public sector personnel.
The enhanced allowance will apply to a wide group of individuals connected to state funded institutions.
Beneficiaries include state government employees, teachers, aided educational institution staff, employees of private colleges and polytechnics receiving government support, local body personnel, contingent workers, pensioners, family pensioners and ex gratia recipients.
The revised rates will also extend to part time teachers, part time contingent staff and re employed pensioners, calculated according to the pay or pension currently drawn.
Employees and pensioners who continue to receive benefits under earlier pay revision structures will also see updated allowance rates.
The revised DA and DR percentages vary depending on the applicable pay or pension revision order, ensuring alignment across different salary frameworks still in operation.
These revisions maintain continuity for individuals yet to transition fully into newer pay structures while preserving parity in inflation linked compensation.
The increased Dearness Allowance will be included in salaries for March 2026, which are scheduled for disbursement in April 2026. Similarly, Dearness Relief at the revised rate will be paid along with April 2026 pensions.
The state government has indicated that separate instructions will be issued regarding arrear payments, suggesting further administrative clarification in the coming months.
Public sector undertakings, statutory corporations, autonomous institutions and grant in aid bodies following the state DA and DR framework may implement the revised rates subject to financial feasibility. Organisations capable of absorbing the additional cost independently may proceed with implementation, while others must consult the government before releasing payments.
Entities heavily dependent on government grants for salary or pension expenses may adopt the revised rates after obtaining appropriate approval. Certain organisations directed to issue separate allowance orders will continue to follow existing procedures.
The allowance revision aims to support income stability for public sector employees and retirees while ensuring administrative consistency across government linked institutions. By extending coverage across multiple employment categories, the state seeks to maintain uniformity in compensation adjustments linked to inflation.
Kerala’s decision to increase Dearness Allowance and Dearness Relief represents a routine policy adjustment designed to reflect changing economic conditions. While the revision provides additional financial support to employees and pensioners, its broader impact will depend on implementation timelines, organisational adoption, and future inflation trends affecting public sector compensation structures.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Feb 23, 2026, 12:02 PM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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