DA up by 6%, but arrears piling up

Poor fiscal health of the state government seems to be the reason behind the partial release of dearness allowance to the government employees for the past year-and-a-half. It now seems to be a norm to release only a portion of the DA while keeping the arrears pending. The government today cleared the proposal to grant 6 per cent DA to its employees and pensioners due from January 1 this year. The August salary of employees will include the enhanced DA of 6 per cent while the DA due from January to July 2015 will be paid in cash along with the October salary. Finance Minister Parminder Singh Dhindsa, while announcing the enhanced DA, has said the rise of 6 per cent in rate of DA would enhance it to 113 per cent of basic pay/pension (earlier rate was 107 per cent of basic pay or pension). While the new DA has been announced, the huge overdraft of the government has forced the state treasury to stop all payments to the employees for the past 15 days. Dhindsa could not be contacted despite repeated attempts. Sources in the department say because of the release of Rs90 crore to sugarcane farmers and another Rs1,400 crore towards interest payments on loans this month, the state went into overdraft and only essential bills are being cleared. While announcing the new DA, the government gave no assurance on the pending arrears due for almost two years. Since January 2014, each time the government announces the DA hike, only a part the allowance is released while no arrears are paid. It is learnt that while 10 per cent DA is pending from January 2014, another DA instalment of 7 per cent, due from July 2014, has not been released. Sources in the Finance Department estimate that the DA due as arrears to employees is around Rs1,500 crore. They say that no decision has been taken on the release of arrears. The government staff get their DA allowance twice a year, in January and July, on the lines of the DA hike for Central Government employees. With salaries and pensions bill of the state government rising phenomenally each year (by almost Rs1,800 crore), this year the government estimates that Rs25,536.35 crore will go towards the payment of salaries and pensions – which is almost 55 per cent of the state’s total revenue receipts for this year. This could be a major reason for the government not releasing the DA arrears.