The Punjab Government has approached the Supreme Court against the Punjab and Haryana High Court’s August 3 order directing it to clear pending Dearness Allowance (DA) dues of state government employees.
The state government has not denied the issue of pending DA payments, instead, it has told the Supreme Court that the arrears are being paid in phases and has sought permission to continue with this approach, citing Punjab’s financial position.
At the centre of the government’s argument is the salary structure of Punjab employees, the difference between basic pay, DA and take-home salary, and the overall amount the state spends on salaries and pensions.
Dearness Allowance, or DA, is an amount paid to government employees to compensate for the impact of inflation on their salaries and it is calculated as a percentage of basic pay.
The current dispute concerns pending DA arrears owed to Punjab government employees and the Punjab and Haryana High Court, in its August 3 order, directed the state government to clear the pending DA dues.
The Punjab Government has now challenged that order in the Supreme Court. It has asked the apex court to allow it to continue paying the outstanding DA arrears in a phased manner, rather than clearing the entire pending amount at once and the state government's argument is primarily linked to its financial position and the expenditure it already incurs on its employees and pensioners.
The government has made two important points before the Supreme Court.
First, it has said that Punjab government employees are already receiving a higher overall salary than Central Government employees in comparable posts, according to the salary comparisons placed before the court, second, the government has said it is willing to ensure that the take-home salary of Punjab government employees is at par with that of Central Government employees.
This distinction is important because basic pay and take-home salary are not the same thing.
An employee's salary can include basic pay, DA and other components and the amount actually received by the employee after applicable deductions is the take-home salary.
The Punjab Government is therefore arguing that the comparison should not be limited only to the DA percentage and it has maintained that the overall salary structure in Punjab is already higher in several cases.
The figures provided by the government compare selected posts in Punjab with corresponding Central Government salaries.
The comparison supplied by the government shows the following:
These figures are being used by the Punjab Government to explain its argument that the overall take-home salary of state employees is already higher than that of Central Government employees in the examples cited.
For example, according to the figures submitted by the state, a Punjab clerk with a basic pay of ₹38,600 has a take-home salary of ₹54,812 at 42 per cent DA and the corresponding Central Government take-home figure given is ₹36,960 at 60 per cent DA.
The difference is ₹17,852 in favour of the Punjab employee and the same comparison has been made for drivers, stenographers, ETT teachers and constables.
The government's figures also show what the take-home salary would be if the Punjab DA were calculated at 60 per cent, but according to the government's comparison, even at 60 per cent DA, the Punjab take-home figures in these examples remain higher than the Central Government figures listed in the table.
The other major part of the government's argument is the financial burden of salaries and pensions and according to the state government, approximately 51 per cent of Punjab's revenue receipts are spent on salaries and pensions.
In simple terms, if the Punjab Government receives ₹100 as revenue, around ₹51 goes towards salaries and pensions, according to the figure presented by the state and the government has compared this with the national average of around 38 per cent, this means Punjab's salary and pension expenditure, as a share of its revenue receipts, is being presented as significantly higher than the average across states.
The government is using this figure to explain why immediately paying all pending DA arrears could put additional pressure on the state's finances.
The government says it has already started paying the pending DA arrears in phases, instead of paying the entire outstanding amount in one go, the state has been clearing the dues gradually.
Punjab has now asked the Supreme Court for permission to continue with this approach, so, the government's position is not that DA arrears should not be paid and its stated position is that the arrears should be cleared in a phased manner, keeping the state's financial position in mind.
The Supreme Court will consider the state's challenge to the High Court order and its request regarding the payment process.