SC’s DA arrears order may strain Bengal’s finances, threatening key welfare schemes before elections.
KOLKATA: Friday’s Supreme Court Division Bench order, asking the West Bengal government to pay 25% of the Dearness Allowance (DA) arrears to its employees within three months, could deliver a crushing blow to Mamata Banerjee’s politics of dole.
According to the state’s lead advocate, Abhishek Manu Singhvi, the total DA arrears the state is liable to pay amounts to a “back-breaking Rs 40,000 crore.” Therefore, the state must pay Rs 10,000 crore by August—a daunting task for a debt-ridden state like West Bengal.
Since Banerjee ousted the Left Front in 2011, a range of welfare schemes has played a significant role in ensuring her government’s return in election after election, despite allegations and evidence of widespread corruption against her party members.
“A rough estimate by the Finance Department suggests that the state government will have to spend more than Rs 10,000 crore to clear 25% of the due DA for employees. Since this expenditure was unexpected, it will definitely affect the state government’s welfare schemes, for which Rs 66,300 crore has been allocated in the 2025-26 financial year,” said a bureaucrat.
This situation could hinder plans to enhance the benefits under Lakshmir Bhandar, a scheme under which 1.2 crore women, aged 25 to 60, receive Rs 1,000 or Rs 1,200 per month (for SC and ST women). This programme has played a key role in securing votes for the Trinamool Congress.
“There was also a plan to enhance the benefits ahead of the polls, as this scheme has given rich dividends to the ruling party in consecutive elections. However, the government may have to rethink this as it has already spent more than Rs 26,000 crore under the scheme,” said an official.
TMC sources admitted that while the state government’s finances are in poor shape, Banerjee would likely try to ensure that Lakshmir Bhandar is not affected, as it remains a proven vote-catcher. “Women vote for us because Didi (Banerjee) has started Lakshmir Bhandar,” one source said.
Top government sources told The Sunday Guardian that the scheme most likely to be affected is Banglar Bari, under which the government promised funds to 28 lakh people in rural areas to build houses. The Banglar Bari scheme was introduced after the Centre halted the release of funds under the Pradhan Mantri Awas Yojana (PMAY) due to major irregularities in its implementation in West Bengal.
In December last year, the state government disbursed the first installment of Rs 60,000 to 12 lakh beneficiaries of the Banglar Bari scheme. The second installment was meant to be released to these beneficiaries in the ongoing financial year. For this, the state government would need to spend Rs 7,200 crore.
Additionally, with Assembly polls scheduled for next year, the government had plans to give the first installment of Rs 60,000 each to another 16 lakh beneficiaries. This would require spending another Rs 9,600 crore in the ongoing financial year.
“Now, with an additional burden of almost Rs 11,000 crore, the housing scheme could be severely impacted. The second installment for the 12 lakh beneficiaries is likely to be delayed, and the plan to provide the first installment to 16 lakh beneficiaries could also be altered,” said an official.
The government’s plans to spend significantly on rural development schemes ahead of the polls could also be affected.
“The state government had allocated Rs 18,300 crore for rural development schemes in its 2025-26 budget, a 44% increase over the previous year. This allocation was made with the upcoming elections in mind, as rural voters are key to electoral success. It remains to be seen whether the state can spend such an amount on rural development,” a source added.
A section of officials noted that the situation could become even tighter if the Supreme Court’s final verdict goes against the state government in August when the case will be heard again.
“If the apex court rules in favour of the employees, the state will be forced to spend another Rs 33,000 crore to settle the remaining DA arrears. In that case, the state would face significant difficulties running welfare schemes, which would be a serious blow to the ruling party ahead of the polls,” said a bureaucrat.
Shyamal Kumar Mitra of the Confederation of State Government Employees, which filed the DA case, said, “This is a significant victory for state government employees after a prolonged legal battle. The Mamata Banerjee government did everything it could to deny us our rightful dues. From the State Administrative Tribunal to the Supreme Court, despite losing six times, it continued to fight and employed delaying tactics. For reasons unknown to us, the hearing in the Supreme Court was postponed an astonishing 18 times before this order was finally issued.”
“The state government can no longer withhold the payment of DA arrears, and it can no longer claim a lack of funds as an excuse. I request Chief Minister Mamata Banerjee not to take this as a matter of prestige and immediately direct the payment of the Dearness Allowance pending since July 2009,” he said.
“Certainly, this will be a huge burden on the state government. We’ll have to see how the government manages this,” said economist Shantanu Basu.
Senior advocate Bikash Ranjan Bhattacharya, who led the fight for state government employees from the State Administrative Tribunal (SAT) to the Supreme Court, said, “The Supreme Court has clearly stated that although it was inclined to dismiss the state government’s Special Leave Petition (SLP), it chose not to do so because the DA issue has national ramifications. However, one thing is clear: the Supreme Court will not give the state government a long rope.”