The Punjab government has officially notified an 8% increase in Dearness Allowance (DA) for its government employees, taking the DA from 42% to 50% and the notification was issued by the Finance Department on Wednesday, September 23, a day after the Punjab and Haryana High Court directed Chief Secretary KAP Sinha to appear before it personally in connection with the pending DA matter.
According to the notification, the revised DA will be effective from September 1, 2026. The Finance Department said the approval of the Governor of Punjab has been obtained for the increase.
The order has been circulated to senior government officials, including Special Chief Secretaries, Additional Chief Secretaries, Financial Commissioners, Principal Secretaries, Administrative Secretaries, Heads of Departments, Divisional Commissioners, Deputy Commissioners, District and Sessions Judges and other concerned authorities.
The DA issue has been pending before the Punjab and Haryana High Court for several months, with government employees demanding payment of pending DA and arrears according to the central government pattern.
How the DA dispute reached the High Court
In April 2026, a single bench of the Punjab and Haryana High Court directed the Punjab government to release pending DA and arrears to employees by June 30. The state government challenged the order before a division bench.
On August 3, the division bench dismissed the government's appeals and directed the state to pay the full pending DA within 15 days. The Court said the payment should follow the central pattern and the norms applicable to state IAS officers. It also directed that 6% annual interest would apply in case of non-compliance and ordered restrictions on certain wasteful expenditure, including advertising.
The 15-day deadline expired on August 17 without the pending amount being released. Ministerial employees subsequently went on a two-day strike.
From August 27 onwards, employees began a larger state-wide agitation involving pen-down protests and mass leave. The government later issued a 'No Work, No Pay' order on September 8.
The Punjab government also approached the Supreme Court on September 1 through a Special Leave Petition, arguing that releasing the entire outstanding amount immediately was not financially feasible. The government has put the outstanding amount at around ₹14,191 crore. The Supreme Court registry, however, raised nine technical objections to the petition.
On September 11, the High Court granted the government 10 days to rectify the technical issues and proceed with the Supreme Court appeal. The Court made it clear that its earlier order would continue unless a stay was granted.
On September 18, Chief Minister Bhagwant Mann held a meeting with employee unions. Following the meeting, the government announced an 8% increase in DA, taking it from 42% to 50%.
On September 22, the High Court took a strict view of the government's handling of the Supreme Court appeal and summoned the Chief Secretary for personal appearance in the contempt matter.
The Finance Department issued the formal notification for the 8% DA hike the following day.
Employees, however, have been seeking DA according to the central pattern and payment of the pending arrears. They have stated that the amount due to employees is around ₹14,200 crore. The government has maintained that although salaries are being paid, releasing the entire arrear amount at once is difficult because of Punjab's debt and other financial liabilities.
The next hearing in the matter is scheduled for October 5, 2026, when the Chief Secretary is expected to appear before the High Court.