Govt. Promises 8% Increase in Dearness Allowance; Power Woes Continue

September

2026

Ending a prolonged standoff with state employees, the Panjab government on 18 Sep announced relief for around 800K employees and pensioners by increasing the Dearness Allowance (DA) by 8%. The decision followed a meeting in Chandigarh between Panjab Chief Minister Bhagwant Mann and representatives of employees’ and pensioners' organizations. Punjab State Ministerial Services Union president Gurnam Singh Virk said the enhanced DA will be released from 1 Oct in two 4% installments and reflected in employees’ and pensioners’ bank accounts. The deadlock began 27 Aug when over 300K government employees went on a statewide strike by availing mass casual leave, pressing the state government to accept their various demands, including release of their pending 18% DA. In the 2022 Panjab Assembly elections, government employees were an important constituency for the Aam Aadmi Party (AAP). Issues such as restoration of the Old Pension Scheme (OPS) formed a significant part of the party's pre-election pitch. After coming to power, the Mann government announced an in-principle decision to restore the OPS in October 2022 but did not implement it. CM Mann also announced compulsory monthly meetings with employee representatives to address genuine issues and postings for women employees within 40 kms of their homes because women employees should not have to choose between their career and their family responsibilities. He also said around 70K government jobs have been created. Bharatiya Janata Party National General Secretary and a Member of Parliament Tarun Chugh criticized the AAP government over the DA issue and said that while employees demanded an 18% hike, it has been raised by only 8% and is being projected as an 'achievement'. A substantial portion of Panjab’s revenues goes into meeting committed liabilities—salaries and wages, pensions, and interest payments—limiting the fiscal space for development spending. In 2026–27, committed liabilities of USD 9.5B are estimated to consume approximately 72% of the state government’s revenue receipts of USD 13.2B. Meanwhile, in another farmer protest over power outages, activists blocked roads in south Panjab. They reminded the AAP government of its promise to deliver eight hours of uninterrupted farm power. Farmers say that power outages last three to four hours a day, often in broken spells, while the crop needs standing water. Drying fields raise transplanting costs, increase land rent, and reduce investments in inputs. Diesel is the backup, and it is eating margins. The issue targets both the AAP government in Panjab and the BJP union government (earlier coverage).