Punjab has money for DA arrears, employees say. Do the numbers back them up?

Employees’ unions in Punjab claim the state has the financial capacity to settle around Rs 14,200 crore in pending Dearness Allowance (DA) and related arrears. Their reasoning is rooted in the significant increase in the state’s tax revenues over the past four years. According to the unions, tax receipts have surged from around Rs 37,300 crore in 2021-22 to Rs 57,900 crore in 2024-25.

They also cite a rise in excise collections, GST inflows, and stamp duty collections, indicating a robust revenue trend. However, their argument is disputed by the state government and some economists, who argue that the revenue figures are being misrepresented. The government asserts that clearing the arrears would be impractical due to existing fiscal obligations and that the revenue growth should not be equated with financial health.

Economists also caution that while tax collections have improved, Punjab still grapples with substantial deficits and high levels of debt.