During the festive season, big and good news is coming regarding dearness allowance (DA).  The government has officially announced an increase in DA and DR. This increase increases employees' dearness allowance from 35% to 37%. This new order will come into effect on January 1, 2026, and it is expected to provide significant relief to millions of state employees in this era of rising inflation. Which state actually made this decision? Let's find out what changes are coming.

Dearness Allowance and Dearness Relief to increase from November
According to the order issued by the Finance Department, this increased dearness allowance will be given to the employees in November along with their October salary. Pensioners will get the revised dearness relief (DR) along with their November 2026 pension. Earlier this year, dearness allowance (DA) was increased from 25% to 35% in February 2026. Local bodies will bear this extra expenditure from their own funds. Apart from this, the government will soon issue a separate order regarding the arrears to be received from January 1, 2026.

Who will get the benefit of increased DA?

All regular employees and teachers of Kerala State Government.

Employees of aided schools, private colleges and polytechnics.

Full-time contract employees and employees working in local bodies.

Apart from this, State Services Pensioners, Family Pensioners, Sanugraha Pensioners and Sanugraha Family Pensioners will also get full benefit of this.

Part-time teachers, part-time contract employees and re-employed pensioners will also get this increased DA as per their salary.

Rules for Public Sector Undertakings and Autonomous Institutions

This includes employees and pensioners of state public sector undertakings, statutory corporations, autonomous institutions, boards, and aided institutions that follow the state's dearness allowance system. However, these institutions will depend on the decision of their governing bodies and their financial situation. Institutions that cannot afford this expense themselves will need to seek government permission. However, institutions that receive more than 90% of their expenditure from government grants can implement it directly.

Who will not benefit from the increase in DA?

The increased DA will not automatically apply to some organizations. These include the Kerala State Electricity Board (KSEB) and the Kerala State Road Transport Corporation (KSRTC). According to reports, these organizations have been directed to issue separate DA and DR orders for their employees. Other states are also expecting this decision, so it remains to be seen when the decision will be made.

PC: Navrastra