The West Bengal government is set to borrow approximately ₹4,300 crore from the market this week to comply with a Supreme Court directive mandating the payment of 25% Dearness Allowance (DA) to state government employees and pensioners.
The apex court’s May 16 order requires the state to disburse the DA arrears by June 27, failing which it could face contempt of court proceedings. The total financial burden to meet the court’s directive is estimated at ₹10,425 crore, prompting the state to seek external funding amid mounting fiscal pressure.
📉 Debt Concerns and Fiscal Strain
West Bengal’s total outstanding debt has ballooned to ₹7.06 lakh crore, up from ₹1.89 lakh crore in 2011. The rise is attributed to increased welfare spending on schemes like Kanyashree, Lakshmir Bhandar, and Swasthya Sathi, which, while politically rewarding, have strained the exchequer.
“It’s a Catch-22 situation for the state government,” said a political observer. “Non-compliance risks contempt, but compliance deepens the debt trap.”
💰 DA Disbursement Plan
- Serving employees: DA arrears may be credited to their General Provident Fund (GPF) accounts, allowing the government to retain liquidity.
- Retired employees: Payments will be made directly, with an estimated outlay of ₹2,902 crore.
🏛️ Political and Administrative Implications
The move comes amid growing pressure from employee unions and opposition parties, who have long demanded parity in DA with central government norms. While the borrowing plan signals the government’s intent to comply, it also raises questions about long-term fiscal sustainability.
Stay tuned for updates on the disbursement timeline and fiscal impact.
