DA-DR Hike: Dearness Allowance for government employees increased by 2%; government makes the announcement in this state ahead of Diwali..

Ahead of Diwali, lakhs of government employees are awaiting an increase in their Dearness Allowance (DA). For central government employees, the DA hike has been pending since July, and an announcement is expected soon. Meanwhile, various state governments are announcing DA increases for their respective employees. In this vein, the Kerala government has also provided relief to its state government employees and pensioners ahead of Diwali.

The Kerala government has announced a 2% increase in the Dearness Allowance (DA). Following this decision, the DA for employees has risen from 35% to 37%. Similarly, pensioners will also benefit from an increase in their Dearness Relief (DR).

**When will the benefit be reflected in salaries/pensions?**
According to an order issued by the state’s Finance Department, the increased DA will be paid along with the salary for October 2026, which will be disbursed in November. The revised Dearness Relief (DR) will be paid along with the pension for November 2026.

This government decision will impose an additional monthly burden of approximately ₹96 crore on the state exchequer. Furthermore, it has been indicated that a separate order will be issued regarding the payment of any arrears resulting from this increase.

**Long-standing demand for a DA hike**
Kerala government employees had been demanding an increase in their Dearness Allowance for some time. This latest hike follows a previous increase in February 2026, when the DA and DR were raised from 25% to 35%.

Dearness Allowance is provided to government employees to help mitigate the impact of inflation. Pensioners receive similar relief in the form of Dearness Relief (DR).

**Which employees and pensioners will benefit?**
The government order covers various categories of employees and pensioners. This includes state government employees, teachers (including part-time teachers), eligible staff in aided schools, colleges, and polytechnic institutions, full-time contingent staff, employees of local bodies, as well as pensioners, family pensioners, and ex-gratia pensioners covered under state government regulations.

Additionally, employees and pensioners of Public Sector Undertakings (PSUs), government corporations, autonomous bodies, boards, and grant-in-aid institutions may also benefit from the increased rates, provided that their respective organizations adhere to the state government's rules regarding Dearness Allowance (DA) and Dearness Relief (DR).

Which employees will not receive the benefit?
The Kerala government's decision does not automatically extend to all employees in the government sector. For instance, employees of public sector corporations—such as the Kerala State Road Transport Corporation (KSRTC)—are not covered by this hike unless they qualify under the relevant applicable rules.

Therefore, employees working in corporations, boards, or autonomous institutions should verify the specific regulations of their own organizations alongside the conditions stipulated in the government order.

An additional monthly expenditure of Rs 96 crore
The increase in DA and DR will result in an additional monthly expenditure of approximately Rs 96 crore for the Kerala government. According to the order, local bodies must cover the additional costs related to their own employees from their own funds. Meanwhile, the state government will issue a separate order regarding the payment of any outstanding arrears, effective from January 1, 2026.

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