The Supreme Court has instructed the West Bengal government to disburse Dearness Allowance (DA) arrears to state employees and pensioners for the period spanning 2008 to 2019. Additionally, a payment of 25% of this amount is mandated by March 31 this year, amounting to over Rs 10,000 crore immediately and Rs 42,000 crore in the long term.
In the recent interim Budget proposal for the fiscal year 2026-27, a four percent increase in dearness allowance was announced for government employees and pensioners in West Bengal. Despite this raise, a substantial 36% gap in DA persists between state government employees and their counterparts in the Union government.
The Supreme Court’s ruling emphasized that state government employees have the right to receive DA at par with central government employees, dismissing the notion that it is a discretionary favor from the state. Economists attribute the Court’s decision to the flawed economic arguments and lack of data-driven discourse by the government in calculating DA for state employees.
The Court highlighted two key flaws in the government’s approach. Firstly, the West Bengal government’s reluctance to accept the All India Consumer Price Index (AICPI) as the benchmark for DA calculation was noted. The absence of an alternative benchmark or formula led to the Court’s observation that the DA calculation method, once defined in the West Bengal Services (Revision of Pay and Allowances) Rules, 2009, cannot be altered.
Economists and legal experts also criticized the existence of different DA rates for distinct categories of state government employees. While one category receives DA at par with central government employees, the other, comprising employees solely working within the state, does not. This disparity in DA rates within the same government setup was deemed illogical and a hindrance to the state government’s argument at the Apex Court.
