In a landmark interim directive, the Supreme Court has ordered the West Bengal government to release 25% of the pending dearness allowance (DA) to its state government employees. The verdict, delivered by the bench of Justices Sanjiv Khanna and Manoj Misra on Friday, estimates that the state will have to arrange over ₹10,000 crore to comply.
This decision has sent shockwaves through the state administration and the ruling Trinamool Congress (TMC), especially in the backdrop of the upcoming 2026 Assembly elections. Sources within the government admit that Chief Minister Mamata Banerjee has been informed, but no detailed discussion with her cabinet colleagues has taken place yet. The government and party remained officially silent on Friday, indicating that the CM herself may respond in due time.
It will take ₹10,000 Crore to Pay 25% DA to Employees, How will West Bengal Government raise funds?
Two Possible Paths, Neither Easy
Senior TMC leaders acknowledge two possible courses of action before the state:
Challenge the order before a different Supreme Court bench—although this is seen as highly unlikely.
Divert funds from various welfare schemes, including flagship initiatives like Lakshmir Bhandar, to raise the necessary amount for DA payouts.
However, even party insiders admit there is no clear road map for how this fund reallocation would be implemented without causing severe socio-political repercussions.
Confusion Over Deadline
There’s also ambiguity about the deadline for compliance. Some legal experts interpret the Supreme Court’s instruction as a four-week timeframe, while others argue the state may have time until the next hearing scheduled for August. Nevertheless, there is no doubt that the 25% DA must be paid, per the Supreme Court’s affirmation of a 2022 Calcutta High Court ruling that mandated DA parity with central government employees.
The original case dates back to demands for DA parity, where the Calcutta High Court on May 20, 2022, ordered the state to pay DA at the central rate of 31%. The Mamata government challenged this order in the apex court, which has heard the matter 18 times but largely postponed it—until now.
Economic Strain and Debt Burden
The state’s financial condition is already strained. In fact, a recent report placed West Bengal’s debt-to-GDP ratio at 38%, one of the highest in India. The Reserve Bank of India and the Finance Ministry have raised concerns. With massive allocations toward rural housing, 100-day employment schemes, and road development programs, any additional financial burden threatens to derail ongoing infrastructure projects.
A minister, speaking anonymously, stated, “We are already funding central schemes like PM Awas Yojana and MGNREGA from our state budget due to pending central funds. Now, we must assess which allocations can be trimmed without derailing public welfare.”
Will Social Schemes Suffer?
There’s growing concern that reallocation of funds for DA may stall or halt popular schemes, many of which are politically crucial for the TMC’s grassroots support. One TMC leader pointed out, “While nearly 10 lakh employees and pensioners are waiting for DA, welfare schemes directly impact millions more voters. Stalling them could harm us in 2026.”
Legal Standpoint and Counterarguments
Senior advocate Bikash Ranjan Bhattacharya, representing the petitioners, claimed the state has no further legal recourse, and compliance is mandatory. He argued, “The government can cut unnecessary expenses like mosque construction, imam allowances, and Puja club grants instead of touching key welfare schemes.”
Finance experts close to the government indicate that the CM’s Chief Economic Advisor and former finance minister Dr. Amit Mitra may be consulted. For now, Finance Minister Chandrima Bhattacharya has declined to comment, only saying, “The CM will speak when it’s time.”
The Supreme Court’s DA directive puts the Mamata government in a financial and political bind. With limited time, mounting debt, and upcoming elections, the challenge lies in balancing employee demands with public welfare expectations. All eyes are now on the Chief Minister’s upcoming statement, which could shape the course of both policy and politics in the state.
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