Relief is coming for state government employees. The long-awaited outstanding DA (Dearness Allowance) is finally going to be paid.
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State government
State government employees have outstanding DA for the period from April 1, 2008, to December 31, 2019. The state is taking steps to pay a quarter of the 141-month outstanding DA. Around 800,000 employees and pensioners will benefit.
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Supreme Court's order
On May 16, 2025, the Supreme Court ordered the state government to pay 25% of the outstanding DA to employees within four weeks. Nabanna has taken this step in compliance with the order. Instructions have already been sent to the district and divisional levels by the Finance Department.
The state government has already approached the Supreme Court seeking modification of the interim order regarding the payment of 25% of the outstanding DA to state government employees. It is not yet clear when the appeal will be heard. Before that, the state government is planning to pay this 25% outstanding amount to avoid a situation like contempt of court.
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When will the outstanding DA be paid for employees?
According to the amount the state has stated in the Supreme Court that it has to pay as total outstanding DA to government employees, 25% will require about Rs 10,425 crore. The state has to pay this amount by June 30. Sources claim that the state government has started preparing to raise loans from the open market to arrange a part of this amount.
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Finance Department
According to Finance Department sources, the state government has no alternative but to borrow amid the financial crisis. There are no specific rules in the law on how this loan money can be spent. The government can spend this money on capital investment or to pay employees' salaries as needed.
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Open market
In the current financial year's state budget, a target has been set to raise a loan of Rs 81,972.33 crore from the open market. Therefore, there will be no problem in raising a loan of Rs 4,300 crore from the market in the first quarter of the current financial year, i.e., between April and June.
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How much did the state government borrow?
In the last financial year, the state government borrowed a total of Rs 80,000 crore from the market. In the 2023-24 financial year, the state borrowed Rs 69,908.98 crore from the open market.
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Nabanna
Nabanna has not yet released any official guidelines regarding the payment of 25% of the outstanding DA. However, sources claim that the state government has informed the Supreme Court of its position within four weeks, i.e., by June 15, in compliance with the Supreme Court's interim order.
