West Bengal DA case turning into a crisis

Finally, in an affidavit before the Calcutta High Court, the West Bengal government has pleaded that the state exchequer does not have enough money to pay the due dearness allowance to the state government employees. Further, the affidavit has pointed out that if the courts force the government to pay the due, it may bring in financial disaster. The affidavit was submitted in a case of contempt of court against the state government.

A division bench of Calcutta High court passed an order on 20th May of this year to pay the due DA to the employees within three months. As the order was ignored by the government, the employees’ organizations filed a contempt case against the chief secretary and the finance secretary of the state. Meanwhile the state has moved the Supreme Court on Thursday to nullify Calcutta High Court’s decision to pay DA due to the government employees.

The entire gamut of unpaid DA over the years has reached a staggering figure of about 25,000 crores, according to an internal estimate of the state’s finance department. The state has no means to pay it, not even by dividing it over a couple of years, as even that would burden the exchequer to the extent of a thousand crore a month.

But the mute point is whether the employer can avoid paying DA to the employees, which is a legal provision to protect the permanent employees from incurring loss due to inflation. In other words, to protect the value of stipulated salary the employees are given compensation for inflation. If the state itself abdicates this duty, the private concerns will follow the footprint, and labour laws will turn into waste papers.

That the cumulative amount of DA to be paid to the state government employees has now reached a staggering figure of 25,000 crore is entirely the state government’s fault. In 2019, the State Administrative Tribunal had directed the state government to pay the dues within six months. But the state government did not even try to raise the current DA rate so that no more dues are accumulated.

Instead the state government tried to stall the order through a long legal process by taking the plea that no DA is due according to its own formula. The High Court has summarily rejected the argument.

The difference between the DA of the central and West Bengal government employees stands at 35 percentage point. The difference has only widened in the last one decade, and it has been reported that the DA paid by Bengal is the lowest among all the states.

Though the state government has moved the Supreme Court against the High Court verdict, sources within the government are not very optimistic about the outcome.

However, it is absolutely true that due to its poor financial health, it is impossible for the state to implement the verdict. In fact, the state government has over the years tried to hide the fact that the state’s economy is in dire straits. but now the opposition alleges that after a few months it will not be able to pay salaries to the workers.

Mamata Banerjee’s government used to criticize the erstwhile Left Front government for the loan burden of the state, but in its 12 years, loan burden has increased threefold. In the current budget it has been stipulated that the estimated outstanding debt of the government in March 2023 will be INR 5,86,438.05 crore. However as the service sector and the MSMEs have grown, the size of the economy has grown too, and it made the loan manageable so far.

But, the situation is worsening now. Mamata Banerjee, the chief minister, has admitted recently that she loses her night’s sleep wondering about the state exchequer. As far as public debt is concerned Bengal stands out as one of the four worst performers. The debt to SGDP (state gross domestic product) ratio for the states of Bihar, Rajasthan and Bengal are respectively 31.95%, 30.89% and 30.66%. Only Punjab (45.26 %) is a worse state in this regard. And of late, the state has sought permission for incurring fresh loan to the extent of 10 thousand crore.

At a time when the state government and the ruling party have been hit by corruption charges of unforeseen scale in the states, and allegations of hundreds of crores ill-gotten money and property have reached the courts, the DA case may soon assume the hue of a crisis, if the Supreme Court validates the High Court order. The political fallout apart, the legal implications will be worth noting. – INDIA NEWS STREAM