DA Outstanding of ₹10,000 Crore to Be Cleared Under 5th Pay Commission: SC Orders

The West Bengal State Government is making a notable move to clear ₹10,000 crore in Dearness Allowance arrears, aligning with a Supreme Court directive mandating 25% DA payment. This marks a major development in the long-standing issue of unpaid DA for state government employees.

Supreme Court Directive on Unpaid DA

The Supreme Court has instructed the West Bengal government to pay 25% of the outstanding DA arrears to its employees. These arrears stem from the period between July 1, 2009, and December 31, 2019, associated with the 5th Pay Commission. The amount due under this directive is approximately ₹10,000 crore.

This directive follows multiple petitions and legal battles fought by employee unions demanding full disbursement of the outstanding DA. Despite the judicial pressure, the state had not provided any official update by the previously expected date of June 15, raising concerns across employee circles.

State Government Moves to Raise Funds

To meet this financial obligation, the West Bengal government has taken the strategic step of approaching the market for a substantial loan. Anonymous officials from Nabanna, the state secretariat, confirm that a formal loan application has been submitted to finance a portion of the ₹10,000 crore liability. It is also anticipated that a part of this requirement will be met using existing state treasury reserves.

While the precise amount being borrowed has not been disclosed, sources suggest it could exceed ₹4,000 crore, pointing to a serious commitment from the administration to comply with the Court’s orders and meet employee expectations.

Government Employees React with Cautious Optimism

The announcement has been met with a mix of relief and caution among government employees. Many have expressed hope that the loan acquisition will expedite DA distribution, which will significantly ease financial burdens, especially for those nearing retirement and currently dealing with cost of living pressures.

However, there remains ambiguity regarding whether the ₹10,000 crore obligation will be fulfilled in one go or paid in phased instalments. Internal sources indicate that an initial instalment disbursement is likely, with further payments rolling out over subsequent quarters.

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Employees’ Forums and Contempt Notice Plans

In parallel, pressure continues to mount from independent bodies like the Karmachari Parishad. The forum has stated that it is preparing to file a contempt notice if the deadline of June 30 is not met. The organisation cites the delay in implementation despite the Supreme Court's directive as a serious concern for government accountability.

They have called on Nabanna to issue an official and transparent roadmap for fund allocation and DA disbursement, failing which legal steps will be initiated. The move underscores rising tensions between employees and the state administration over unresolved fiscal matters.

Significance of This Move on Policy and Precedence

This marks a key turning point in West Bengal’s financial management practices. If successful, the utilisation of a market-backed loan to fulfil salary allowances could set a precedent for resolving similar cases in other states facing budget constraints. It could be seen as a balancing act between fiscal pressure and administrative responsibility.

Additionally, the successful implementation of this payment may positively influence ongoing deliberations related to the implementation timeline of the 6th Pay Commission recommendations in West Bengal. A positive outcome may prompt speedy measures on that front, too.

Status of Official Notification and What Lies Ahead

As of June 20, 2025, no official gazette notification has been issued by the West Bengal government regarding the disbursement date of the DA. 

Conclusion

The West Bengal Government’s decision to procure a market loan to honour 25% payment of longstanding DA arrears marks a significant breakthrough in the ongoing conflict between employee demands and financial feasibility. While challenges remain in terms of implementation and timelines, this step has instilled cautious optimism among state employees. If executed efficiently, this move may serve as a model for other regional governments managing similar financial obligations.

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