Punjab Finance Minister Harpal Singh Cheema announced on Thursday that the state government is ready to provide salary plus DA at par with Central Government employees if that is what employees seek. As reported by Punjab Times (English Edition), the minister clarified that the state is prepared to match the overall compensation package rather than simply replicate the Centre's DA percentage. This represents a significant shift from the government's previous position of offering Central basic pay with Central DA, effectively reviving a pay reform recommended six years ago by the Punjab government appointed Montek Singh Ahluwalia panel. The ministers emphasized their commitment to engage through dialogue rather than confrontation to resolve outstanding employee issues.
Punjab has proposed hiking dearness allowance from 42% to 60% for 85,000 state government employees, according to Cabinet Minister Aman Arora. As reported by Mint, the recommendation will be sent to Chief Minister Bhagwant Singh Mann for final approval. The move will cover those state government employees recruited after 17 July 2020, whose basic pay is based on the central government's 7th central pay commission prescribed matrix, but DA is based on the state's pay pattern. Employees recruited before 17 July 2020, who are paid as per the Punjab Pay Commission's matrix are not included in this proposal. The decision was taken by a three-member Cabinet Sub-Committee comprising Finance Minister Harpal Singh Cheema, Social Security Minister Dr Baljit Kaur, and Arora, who is the state's Industries and Commerce Minister. Arora described it as a 'Janmashtami gift' for employees.
The Punjab government estimates that raising DA from the existing 42% to 60% on the state's present basic-pay structure would cost about ₹6,500 crore annually. According to Cheema's statements reported by The Pioneer, salaries and pension account for 51% of Punjab's total revenue, as against an average 38% in other states. The state's 2025-26 Budget Estimates provide ₹57,177.9 crore for salaries and pensions against revenue receipts of ₹1,11,740 crore. Cabinet Minister Aman Arora emphasized that increasing DA to 60% would place an additional annual burden of around ₹6,500 crore on the state exchequer, which must be balanced against the state's responsibility to fund schools, hospitals, infrastructure and other essential services for the three crore people of Punjab. The government has also pointed to Punjab's existing DA history, with DA standing at 28% in November 2021, rising to 34% in October 2022, 38% in December 2023 and 42% in November 2024.
As reported by The Pioneer, over 3 lakh state employees participated in a state-wide, one-day mass leave protest on 27 August to push for immediate clearance of pending DA and other demands. More than 150 employees presented a united front as the Manch, and over 3.50 lakh pensioners participated in the 'maha hartal'. Key demands include payment of pending 18% DA, implementation of the Old Pension Scheme (OPS), regularisation of contractual employees, implementation of minimum wages for workers, and extension of Punjab pay scales to employees recruited after 17 July 2020. The strike affected public services across the state. Punjab Sanjha Mulzam Morcha leader Sukchain Singh Khera said employees were ready to hold talks with the government, but only after the show-cause notices issued to them were withdrawn. Sukhchain Singh Khera, coordinator of the Sanjha Mulazim Manch, the umbrella body of 154 state-level employees' unions, said employees were ready to hold talks with the government, but only after the show-cause notices issued to them were withdrawn. The employees have also threatened to go on mass casual leave on 8 September if the state government does not withdraw a recent notice imposing disciplinary action against those who recorded 'unauthorised absence' on 27 August.
According to Cheema's statements reported by The Pioneer, Punjab government workers have among the highest salaries in the country. The minister highlighted that employees in several major categories already draw overall higher take-home salaries than their central government counterparts. Basic pay plus DA paid to employees in Punjab is higher than that of other states such as Bihar, Haryana, Rajasthan and Uttar Pradesh. Government employee salaries in Gujarat are 28% lower than Punjab, as per the report. The government's broader argument is that employees in several major categories in Punjab already receive higher take-home compensation than their counterparts in Haryana, Rajasthan, Uttar Pradesh, Bihar, Madhya Pradesh and Gujarat, despite Punjab's DA being lower. Arora reiterated claims that Punjab government employees have historically drawn substantially higher salaries than their central government counterparts, stating that employees in several major cadres receive 30-70% higher pay under Punjab-specific pay scales. He said that employees in several major cadres already draw overall higher take-home salaries than their central government counterparts, with the situation being different for employees recruited post-July 2020 who do not enjoy the higher Punjab entry pay scales.
