The Kerala government is considering a major policy shift by extending the salary and pension revision cycle for state government employees and pensioners to once every ten years. In a bid to offset the impact of this delay, the administration is planning to ensure the regular and timely disbursement of dearness allowance (DA) and dearness relief (DR).

Reconstituting the pay commission
As part of this transition, the United Democratic Front (UDF) government is moving to reconstitute the Pay Revision Commission, which was set up by the previous Left Democratic Front (LDF) government just before it vacated office. The commission, headed by former chief secretary VP Joy, is set to see its composition altered. The state has already begun searching for suitable candidates to replace the current two members, who were political appointees of the previous LDF administration. A final decision on whether to retain VP Joy as the commission's chairman is yet to be made.

Under the proposed plan, the UDF government aims to institutionalise a ten-year cycle for comprehensive salary overhauls, bringing state practices closer to those of the central government. To make this policy transition acceptable to the state workforce, the government intends to streamline the distribution of DA and DR, preventing the massive backlogs that have historically strained state finances and triggered widespread employee dissatisfaction.

Fiscal strain and pending arrears
The background to this decision lies in the severe fiscal challenges experienced by the state over the last few years. While the first Pinarayi Vijayan-led LDF government implemented a generous pay revision, the subsequent financial burden proved unsustainable. This forced the second Pinarayi administration to freeze DA payments, leading to intense protests from government employees.

Although the LDF government eventually sanctioned the outstanding DA arrears just before the assembly elections, it did so by deferring the financial liability. An order was issued stating that the retroactive dues would be disbursed during the tenure of the incoming government. However, the current UDF administration has not yet made a final decision on taking up this heavy financial liability, leaving the timeline of these payments uncertain.

Pay revision is carried out every five years in Kerala, unlike every ten years in the case of Central government employees and pensioners.  However, the five-year cycle has already been broken by the Pinarayi government. If the five-year revision pattern was followed, a new pay commission should have been appointed in 2024. 

Instead, the 12th Pay Commission headed by former Chief Secretary V P Joy was constituted only in February 2026, and was asked to unrealistically submit its report in three months.  

Extending the pay revision period has been a policy measure that governments in Kerala were nearly tempted to adopt to ease Kerala's fiscal stress. It was political factors, particularly the wrath of the employees, that caused governments to refrain from making such a move. 

The 10th Pay Revision Commission headed by Justice C N Ramachandran, for instance, had recommended that Kerala should also follow the 10-year pattern of the Centre to spread the burden of large payouts over a longer period. The first Pinarayi Ministry struck it down after intense deliberations.

Chief Minister V D Satheesan's 'white paper', too, has a mention of a 10-year revision period, though not in a very assertive way. The 'white paper' had more seriously recommended increasing the age of retirement of government employees. If the age was increased by even one year, from 56 to 57, it said Kerala could have saved Rs 6000 crore. But this recommendation did not find a place in Satheesan's first budget.

The attractiveness of a longer revision cycle stems from the fact that Kerala spends almost 80 per cent of its revenue on salaries, pensions and interest, far more than most other states in India.