Kerala government gives big gift of 10% DA to employees, relief rate increased!

By Samira Vishwas On Feb 21, 2026

The Kerala government on February 20, 2026, announced a 10 percentage point increase in Dearness Allowance (DA) for state employees, taking the rate from 25% of basic pay to 35%. The Finance Department issued an official order (GO(P) No.27/2026/Fin dated 20/02/2026), which provided relief to the rising expenses.

**Beneficiaries** include:
– State government employees
– Staff of Local Self-Government Institution
– Teaching and non-teaching staff in aided schools, colleges and polytechnics
– Full-time contingent employees
– Part-time teachers, part-time contingent staff, and re-employed pensioners (proportional to eligible pay)

The increased DA will be reflected in the **salary of March 2026** (paid in April). A separate order will state the arrears clearance.

**Dearness Relief (DR)** has also been increased by 10 percentage points (35%) for pensioners, family pensioners and ex-gratia recipients, which will have to be paid with **April 2026 pension**.

**PSUs**, legal corporations, autonomous bodies, boards and grant-in-aid institutions that follow the State DA/DR pattern:
– To implement this, approval of the Board/Governing Body is required on the basis of financial health.
– If the expenses cannot be borne internally, then approval from the State Government is required first.
– Institutions that receive >90% of salary/pension funding from government grants can proceed only with the approval of the governing body.

**Relaxation** applies to **Kerala State Electricity Board (KSEB)** and **Kerala State Road Transport Corporation (KSRTC)**—they will issue separate orders and follow the existing process.

This increase is in line with the central trend (e.g., recent increase in union DA) and is aimed at reducing inflation. Local bodies will have to bear the extra burden from their own resources. There may be UGC/AICTE aligned adjustments for teaching staff (e.g., up to 58% in some reports), although the main order focuses on the state pattern.

This decision will provide immediate financial help to lakhs of employees and retired people in Kerala.