The door of justice has opened for government employees of West Bengal, as the Supreme Court delivered a historic verdict on the long-standing Dearness Allowance (DA) dispute on Thursday. The court has given strict instructions to the Mamata government to pay all DA arrears between the years 2008 to 2019 to approximately 20 lakh employees of the state. Further solidifying this relief, the Court ordered that following its previous interim instructions, the government must mandatorily release at least 25 percent of this outstanding amount by March 6. This decision has not only provided economic support to millions of families but has also created a major financial challenge for the state government.
Giving a major jolt to the Mamata Banerjee government of West Bengal, the Supreme Court delivered a decisive verdict in favor of about 20 lakh government employees of the state. The court clarified that Dearness Allowance (DA) is a statutory and legal right of the employees, which the government cannot withhold.
Key points of this significant decision
Arrears of 2008-2019: The court has ordered that employees be given the full period’s outstanding DA from the year 2008 to 2019.
25% payment by March 6: Upholding its interim order, the Supreme Court has directed that at least 25 percent of the total outstanding amount must reach the employees’ accounts by March 6, 2026.
Justice Indu Malhotra Committee: To decide how and in what installments the remaining 75 percent outstanding amount will be paid, the court has constituted a high-level committee chaired by former Supreme Court Judge Justice Indu Malhotra.
Financial Burden: According to the state government’s estimates, this decision will put an additional financial burden of about ₹43,000 crore on the treasury.
This same bench of the Supreme Court had reserved its verdict last year in August after a long hearing. Looking at the sequence of events in this matter, in an interim order given on May 16, the court had given strict instructions to the state government to pay 25 percent of the employees’ outstanding Dearness Allowance (DA) within three months.
However, the Mamata Banerjee government expressed inability to comply with this order and knocked on the doors of the Supreme Court citing a lack of funds. The government had requested the court to extend this time limit (deadline) for payment by another six months considering the financial condition of the state. Now, in the fresh verdict, the court has increased the government’s challenges by directing payment by March 6.
The mathematics of Dearness Allowance (DA) for West Bengal government employees has been quite complex. According to previous budget proposals, the DA of state employees was fixed at 18 percent of the basic pay from April 1, 2025.
However, despite this increase, the difference in allowance between Central and State government employees remains a major issue.
