Government Hikes DA, Big Relief for State Employees and Pensioners

DA Hike: Good news for state government employees. The Kerala government has offered substantial relief to its employees. A 10 percent increase in dearness allowance (DA) has been approved by the government. The DA has risen from 25% to 35%. This new DA will be reflected in the salary for March.

This decision will positively impact state government employees. Moreover, local body employees, teachers, and non-teaching staff from aided schools, colleges, and polytechnic institutions will also benefit. Full-time contingent employees are included in this increase. Additionally, the government has chosen to extend this increase to part-time teachers, part-time contingent workers, and re-employed pensioners. For these individuals, the DA will be calculated based on their eligible salary.

Furthermore, a 10% increase has been announced for state service pensioners, family pensioners, and ex-gratia recipients. Dearness Relief (DR) will also see a 10 percent increase. Pensioners will receive this enhanced amount along with their pension in April.

The government has indicated that a separate order will be issued for the payment of the outstanding amount due to this increase. Local bodies will need to cover the additional costs from their own funds. State PSUs, boards, and autonomous bodies may also implement DA and DR adjustments based on their financial capabilities. However, this order will not yet apply to the Kerala State Electricity Board and the Kerala State Road Transport Corporation, for which separate orders will be issued.

Meanwhile Central government employees have been waiting for a long time for a dearness allowance hike. Looking at past records, the government has mostly increased their dearness allowance before Holi. It’s expected that the government will increase the DA before Holi in 2026 as well. Now, the question is, by how much can the government increase the dearness allowance? A 2% increase in dearness allowance (DA) is almost certain. The Labor Bureau has released the AICPI-IW data for December 2025, which is 148.2. Based on this, the DA could increase from 58% to 60%. Millions of employees are waiting for the announcement of the DA hike. This year, Holi is on March 3, 2026. Therefore, the question is: will the government announce the DA before Holi?

When is DA announced?

The government increases DA twice a year. One is effective in January and the other in July. However, the announcement is usually made later. Sometimes it occurs before a major festival like Holi or Diwali. For example, in 2025, Holi fell on March 14th, but the DA hike was announced on March 28th. In October 2025, the DA was increased before Diwali. Employee organizations believe that this time the government may make the announcement before Holi. However, the final decision will be clear only through a government order.