DA arrears: Punjab Government to pay with 6 percent interest after High Court orders
Due to no stay by the Supreme Court on the High Court decision, the Punjab Government will have to pay arrears of Rs 32,418 crore to employees and pensioners along with interest.
The Punjab Government will have to pay the arrears of dearness allowance and relief of its employees and pensioners with 6 percent annual interest. The Supreme Court has not stayed this decision pronounced by the Punjab and Haryana High Court.
According to the status report submitted in court by Chief Secretary K.A.P. Sinha, a total liability of Rs 32,418 crore stands against the government. The government has acknowledged that the court order of August 3 is effective and the obligation to return this amount with interest remains.
It has been clarified in the report that the arrears alone between July 1, 2021, and September 30, 2026, are approximately Rs 22,818 crore. If employees get the allowance on the lines of the Central Government, an additional burden of Rs 4,712 crore will fall on the state exchequer every year.
The government has argued before the court that an appeal was filed in the Supreme Court on September 1 against the August 3 order. After removing the registry's objections, this application was refiled on October 1. According to the government, it is pursuing legal recourse and the time taken in this process should not be considered a willful violation of court orders.
The Chief Secretary stated that according to the revised estimates for the year 2025-26, the annual salary and pension budget is about Rs 58,064 crore. Therefore, it will be necessary to make appropriate provisions in the budget to pay the arrears.
The government also clarified that in a meeting held on September 18 under the leadership of the Chief Minister, an 8 percent increase in the allowance was decided. Then the Finance Department issued an order on September 23 increasing the rate from 42 to 50 percent, which has come into effect from September 1, 2026, and has been given in the October salary.
Key developments
- No stay by the Supreme Court on the August 3 orders of the High Court
- Total liability of employees and pensioners against the government is Rs 32,418 crore
- Annual interest of 6 percent will have to be paid on the arrears amount
- Government justified the delay due to filing of petition in the Supreme Court
