Kerala Cabinet’s DA arrears decision overruled by Finance Department; 33-month dues denied to employees and pensioners

Thiruvananthapuram: The Finance Department has been accused of overturning a Cabinet decision by issuing an order that allegedly denies the payment of arrears related to the 4 % Dearness Allowance (DA) increase sanctioned for government employees and pensioners.

The Cabinet had earlier decided to grant DA arrears effective from January 2023. However, the Finance Department’s order merely stated that the DA rate for employees and pensioners was being raised from 18 % to 22 %, without mentioning arrears. As a result, the arrears for 33 months have reportedly been denied.

During the Cabinet meeting held on October 29, the government announced a series of welfare measures, including the DA hike. The official Cabinet note had clearly mentioned that one instalment of DA/DR (4 %) due from January 1, 2023 should be disbursed along with the salary or pension for November. The Cabinet approved this recommendation without any amendments.

It is understood that the file forwarded to the Finance Department was consistent with this decision, ensuring that arrears would be paid. However, senior-level intervention led to the exclusion of the arrears component. The order issued by the Additional Chief Secretary of the Finance Department on October 31 raised the DA rate from 18 % to 22 %, but omitted the date from which the arrears were payable, thereby effectively denying them.

Officials have pointed out that any modification to a Cabinet decision can only be made by the Cabinet itself. While minor adjustments are sometimes approved at the Chief Minister’s level, unilateral alteration by the Finance Department is considered a violation of established procedure.

The DA hike is expected to cost the government an additional ₹188 crore per month. If arrears were also granted, the total financial burden would amount to ₹6,204 crore. At present, government employees and pensioners are owed arrears for six instalments, totalling 13 % DA. Apart from the DA issue, all other decisions from the same Cabinet meeting have been implemented as approved.