Affidavit on dearness allowance

The term “government” does not refer only to the political group consisting of ministers and elected representatives. The meaning of government becomes complete and meaningful only when it also includes the employees who run the administrative machinery and keep the system moving. In that sense, an affidavit filed in the High Court the other day by Finance Department Under Secretary K.A. Navas, on behalf of the government, on the issue of dearness allowance (DA) for employees and teachers, amounted to the government distancing itself from its own workforce. The affidavit stated that dearness allowance is not a right of employees and that when and how it is granted is a policy decision of the government. This argument triggered widespread protests and strong opposition from employees' organisations.

The affidavit further said that the DA would be effective only from the date of the order declaring it and that employees have no legal right to claim arrears. This, in effect, appeared to deny employees their rights and question their legitimate claims. By also pointing out that the Supreme Court had earlier stated that court intervention in matters related to dearness allowance should be limited, the affidavit even created the impression and interpretation that employees were on one side and the government on the other. The additional affidavit was filed while the High Court was considering a petition by the Federation of University Employees Organisations seeking payment of pending DA. At the same time, it is clear from the affidavit itself that severe financial stress was the reason behind this stand, and that there was no intention to deny employees their rights.

This is likely why the affidavit became a major news issue and triggered protests by employees, prompting State Finance Minister K.N. Balagopal to clarify the government’s position at a press conference the other day. The minister assured that paying DA arrears to employees is the responsibility of the government and that the full pending amount would be paid. At present, the DA announced for the period from July 1, 2023, to July 1, 2025, is pending. This comes to a total of 13 per cent. If the DA due to be announced this January is also added, the total will rise to 15 per cent. According to current estimates, the government will have to find at least Rs 16,000 crore from the treasury to clear the arrears. Due to the severe financial crisis facing the state, the government may be forced to postpone payment of DA arrears for the time being.

It is likely that the government took the stand that the timing and manner of DA payment is a policy decision out of concern that the High Court might set a deadline for clearing the arrears. This also explains why the government referred to earlier Supreme Court observations on the matter. As per norms, the central and state governments are required to announce DA every six months as a fixed percentage of basic pay, based on the cost of living index. Regardless of the financial situation, DA cannot be withheld or denied. If there is a delay in announcing DA, it is usually given retrospective effect from a fixed date for the same reason. Despite being fully aware of these facts, the government appears to have taken a legal stand under financial pressure. With a little more care, this argument and the resulting misunderstanding could have been avoided.