Punjab has money for DA arrears, employees say. Do the numbers back them up?

Citing a sharp rise in Punjab’s tax revenues over the past four years, employees’ unions say the state can afford to clear the roughly Rs 14,200 crore in pending Dearness Allowance (DA) and related arrears sooner than later.

Punjab’s own revenue numbers form the centrepiece of their argument. Tax revenue has risen from about Rs 37,300 crore in 2021-22 to Rs 57,900 crore in 2024-25, according to figures cited by the unions. Citing the Comptroller and Auditor General report, they point to a similar increase across major revenue heads.

Excise collections, which averaged about Rs 4,406 crore in 2016-17 under the SAD-BJP government and Rs 6,158 crore under the Congress government in 2021-22, are expected to touch Rs 12,800 crore under the current government this financial year.

GST inflows have nearly doubled on an annual average basis, from Rs 15,541 crore in 2021-22 to about Rs 32,000 crore this year. Early figures for the current financial year, they say, point in the same direction. Revenue receipts during April-July 2026 reached 29.08 per cent of the annual target, compared with 27.44 per cent during the corresponding period a year earlier.

Non-tax revenue nearly doubled over the same period, while both the revenue and fiscal deficits were accumulating at a slower pace than last year. Employees and some economists say the trend indicates that the state has greater fiscal room than the government is willing to acknowledge.

That is only part of the unions’ argument. Employee leaders say the government’s case for staggered payments rests on what they allege is a misleading assessment of the state’s finances. “The calculations were manipulated,” alleged Vikram Dev Singh, president of the Democratic Teachers Front and a state leader of the Joint Coordination Committee of the Democratic Employees Federation.

Vikram Dev pointed to a sealed report submitted by the government to the Punjab and Haryana High Court when the DA dispute first arose, which, he said, claimed that Punjab was spending a higher proportion of its income on salaries and pensions than other states.

He alleged that the calculation was skewed. According to him, the share of state income going towards salaries has actually fallen from 104 per cent to 70 per cent over the past five to six years if central grants, Punjab’s share of GST and loans are counted as income.

Vikram Dev also argued that DA should not be clubbed with the broader salary bill. Punjab’s per capita income, he noted, is over Rs 2 lakh, a factor that the state’s Pay Commission is required to consider while reviewing pay scales every 10 years.

DA, however, is an inflation-linked allowance that is decided separately from Pay Commission awards. “You cannot connect DA with salaries. These are two different things,” Vikram Dev said. Germanjeet Singh, state president of the Democratic Employees Federation (DEF / DMF / Democratic Mulazam Federation), also disputed the government’s estimate of the DA arrears.

He said the Rs 14,191 crore figure cited by the government was inflated. According to the union’s calculations, Sixth Pay Commission dues for 66 months from January 2016 to June 2021 amount to about Rs 12,600 crore, comprising roughly Rs 7,200 crore in pensioners’ arrears and Rs 5,400 crore owed to employees.

He pointed out that the government’s own letters in April had proposed clearing the dues over 36 instalments, amounting to about Rs 4,200 crore a year. This, he said, was within the state’s means given the improvement in revenue collections.

Germanjeet Singh also disputed the government’s claim that 51 per cent of its earnings go towards employee costs, saying that the bill included MLA salaries and the pensions of bureaucrats, making the liability appear larger and the room for paying DA smaller.

Finance Minister Harpal Cheema does not dispute that collections have improved but said the government did not create the liability. “We inherited it… and we have already paid over Rs 6,000 crore to employees,” Cheema said.

In early September, the government paid 60 per cent DA to 85,000 employees recruited after July 2022, saying they had been receiving lower salaries. The government maintains that higher revenue does not automatically translate into spare cash.

The state still has to meet salaries, pensions, interest payments and debt-servicing obligations, while its revenue and fiscal deficits, although declining, remain substantial.