Top Court's DA Verdict To Cost Bengal Exchequer Rs 10K Crore Immediately, Rs 42K Crore In The Long Run

(MENAFN- IANS) Kolkata, Feb 6 (IANS) The Supreme Court's verdict directing the West Bengal government to pay Dearness Allowance (DA) arrears to the state government employees and pensioners for the period between 2008 and 2019 and also 25 per cent of that amount by March 31 this year, will cost the state exchequer a little over Rs 10,000 crore immediately and Rs 42,000 crore in the long run.

"These figures are tentative. An exercise had started to figure out the actual expenditure on this count, and the final figure would surface only after that exercise is completed," said a state Finance Department official on Friday.

While presenting the interim (Vote-on-Account) Budget proposal for the financial year 2026-27, a four per cent hike in dearness allowance was announced for the government employees and pensioners in West Bengal. However, even after the increase, the DA gap between the state government and their counterparts in the Union government continues at 36 per cent.

The Supreme Court, on Thursday, also upheld the argument of state government employees that getting DA at par with central government employees was their right and not a "gift of mercy" as argued by the state government.

Economists feel that the main reasons behind the observation of the Apex Court were the economically flawed arguments on the part of the government for calculating the DA for state government employees, which also lacked data-driven discourse.

The first flaw: The West Bengal government was not accepting the All India Consumer Price Index (AICPI) as the benchmark for calculating and determining DA for the state government employees. Notably, AICPI is a nationally accepted benchmark and formula for calculating and determining DA for state government employees.

Now, while the state government was stubborn on its stand of not accepting ACPI as the bench for DA calculation, it failed to present any alternative benchmark or formula for the same, which ultimately evoked the observation from the Apex Court that once DA is defined in the West Bengal Services (Revision of Pay and Allowances) Rules, 2009 (ROPA) by linking it to the AICPI, the state government could not alter the manner of its calculation through subsequent office memoranda.

The second flaw, according to economists, was against the logical principle both economically and legally. The flaw was over the existence of two separate DA rates for two categories of employees of the same state government.

The first category included those West Bengal government employees who were posted in other states on behalf of the state government. This category receives DA at par with their counterparts in the Central government.

The second category is those West Bengal government employees who are posted in their native state only, and they are not paid dearness allowance at par with the Central government and many other state governments.

Both economists and legal experts feel that these differential rates of dearness allowance for two sets of state government employees are quite unusual and act as a major hurdle for the state government to logically present its argument at the Apex Court.

Considering that DA was a part of the salary structure, differential rates of dearness allowance for different categories of permanent employees, and more especially if they are employees of the same government setup, cannot be followed.

MENAFN06022026000231011071ID1110704497