West Bengal: Interim Budget announces 4% DA hike as apex court orders DA arrears payout

In a significant relief for state government employees, the West Bengal interim Budget presented on Thursday proposed a 4% increase in Dearness Allowance (DA). The interim Budget was tabled by Finance Minister Chandrima Bhattacharya in the Assembly at around 2.30 pm, outlining several welfare-focused measures ahead of the next financial year.

Along with the DA hike, the government announced a monthly increase of Rs 500 for beneficiaries of the popular ‘Laxmi Bhandar’ scheme. The enhanced assistance, which supports women from low-income households, will come into effect from February.

The Budget speech clarified that while the DA hike has been announced now, it will not be implemented immediately. Instead, the revised DA will be applicable from April 1, marking the beginning of the next financial year. As a result, state government employees will receive the additional 4% DA along with their April salary.

The interim Budget also proposed a Rs 1,000 increase in allowances for ASHA and Anganwadi workers, recognising their role in healthcare delivery and social welfare at the grassroots level. In another key announcement, the Finance Minister said the state government plans to roll out a new scheme, Banglar Yuva Sathi, to provide a monthly allowance of Rs 1,500 to unemployed youth aged between 21 and 40 years. The allowance will be paid until beneficiaries secure employment or for a maximum period of five years. The scheme is proposed to be launched on August 15, subject to the Trinamool Congress returning to power.

Additionally, civic volunteers and Green Police personnel will receive a monthly pay increase of Rs 1,000. The state has earmarked Rs 150 crore for this purpose in the interim Budget.

Supreme Court on DA issue

Meanwhile, the issue of DA arrears remains under judicial scrutiny. On Wednesday, the Supreme Court reiterated that the West Bengal government must immediately clear 25% of pending DA arrears owed to state government employees. A bench comprising Justices Sanjay Karol and Prashant Kumar Mishra directed the state to clear arrears pending since 2008, in line with the All India Consumer Price Index (AICPI).

Commenting on the court’s direction, Bhaskar Ghosh, Chief Convenor of Sangrami Joutha Mancha, said the case had been ongoing for three years and that the verdict itself took four years to arrive. He described the ruling as “better late than never” and urged the state government to implement the Supreme Court’s judgment in full. He also pointed to long-standing vacancies, claiming that around six lakh posts across departments have remained unfilled for over a decade.

In its judgment, the Supreme Court held that once dearness allowance is defined by linking it to the All India Consumer Price Index under statutory rules, the state cannot alter the method of calculation through subsequent office memoranda. The court said DA is a legally enforceable right that has accrued in favour of state employees and directed the release of arrears for the period between 2008 and 2019, while clarifying that employees are not entitled to DA twice a year.

"To receive dearness allowance is a legally enforceable right that has accrued in favour of the respondents-employees of the State of West Bengal," the apex court said in its ruling.

As per Live Law, the bench described DA as a crucial instrument of inflation protection, emphasising that it is not an additional benefit but a mechanism to preserve a minimum standard of living amid rising prices. Taking into account the financial implications, the court constituted a committee to determine the total payable amount and the payment schedule, directing that the first instalment be released by March 31. Retired employees were also held eligible for benefits.

According to lawyers, the total outstanding DA dues are estimated at around Rs 41,000 crore.