Punjab Raises Dearness Allowance to 53%, Touching 8 Lakh Workers

Punjab Chief Minister Bhagwant Mann announced a 3% increase in dearness allowance on Monday, lifting DA to 53% for roughly 8 lakh government employees and pensioners — about 4 lakh serving staff and 3.5 lakh retirees. The hike takes effect in December salaries and pensions and adds Rs 330 crore to the state's expenditure.

Mann framed the move as a Diwali gift with a hard fiscal footprint: an annual financial benefit of approximately Rs 3,988 crore for employees. "Employees are the backbone of our government, and we are fully committed to their welfare, rights and overall well-being," he said in Chandigarh. The announcement lands less than four months before Punjab's 2027 Assembly elections.

How fast is DA moving?

The increase marks an 11 percentage-point jump within two months. In September, Mann's government announced an 8% DA rise; Monday's 3% tops it up. "This is the first time that any government has increased DA by 11 percentage points within a span of just two months," the chief minister said.

Since taking office in 2022 — when DA stood at 28% — the government has raised the allowance by 25 percentage points. The cumulative 11-point increase this financial year will deliver Rs 1,813 crore to employees and pensioners, according to Mann.

What happened to the Pay Commission arrears?

The state inherited a large pending liability on the Sixth Punjab Pay Commission. Its recommendations were meant to take effect January 1, 2016, but weren't implemented until July 2021, accumulating arrears of roughly Rs 14,191 crore for the period through June 30, 2021.

Mann said his government built a phased payment plan for that amount. Pensioners received their arrears first, on April 1, 2025. Payments to serving employees began April 1, 2026. So far, Rs 4,891 crore has been released; the remaining Rs 9,300 crore will be paid, Mann confirmed.

What else did the government highlight?

• Mann said the past four years and nine months saw "the largest-ever recruitment drive" in state government departments.
• The drive delivered 71,777 government jobs to young people, awarded "purely on merit, without any bribery or recommendation."
• Mann said he has preferred dialogue on employees' pending demands and that "our doors remain open to them at all times."

He contrasted his administration's record with predecessors who, he said, frequently cited empty treasuries to withhold benefits. "Employees and pensioners are members of the Punjab Government family and are the backbone of the administrative machinery," Mann said. "They are performing their duties with dedication and commitment to address the grievances of the common people, maintain law and order, and implement various welfare schemes."

The success of public welfare schemes, he added, owed much to employees' "invaluable contribution."

For HR and payroll teams in Punjab's public sector, the December effective date sets the compliance clock: payroll runs must reflect the 53% DA rate, and pension disbursements the matching dearness relief. With Rs 9,300 crore in Pay Commission arrears still to flow through, finance departments will be managing two parallel payment streams into the coming fiscal year.