The BJP government in West Bengal on Monday unveiled its first budget, announcing a 20% increase in dearness allowance (DA) and dearness relief (DR) for state government employees and pensioners, providing a major boost to lakhs of beneficiaries.

The hike raises the effective DA and DR to 38% of basic salary and significantly reduces the gap between allowances paid to West Bengal employees and their counterparts under the central government. The move narrows the disparity by 22 percentage points, compared with a gap of 42 percentage points earlier.

The revised allowance will come into effect from October 1, 2026.

The issue of DA parity has been a long-standing demand of state government employees, who had repeatedly sought benefits comparable to those enjoyed by central government staff. The difference in pay and allowances has been particularly pronounced because West Bengal employees continue to be covered under the older 5th and 6th Pay Commission frameworks, while central government employees are currently under the 7th Central Pay Commission.

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With work on the 8th Pay Commission already underway at the Centre, employee unions had expressed concerns that the pay gap would widen further if corrective measures were not taken.

Dearness allowance is a cost-of-living adjustment provided to government employees, public sector staff, bank employees, defence personnel and pensioners to offset the impact of inflation. It is calculated as a percentage of basic salary and is revised periodically based on changes in the Consumer Price Index (CPI). DA forms part of taxable income and is taxed according to the applicable income tax slab.

Employee representatives have indicated that more relief could be on the way. Earlier this month, Joint Struggle Forum of State Government Employees convenor Bhaskar Ghosh said Chief Minister Suvendu Adhikari had committed to implementing the recommendations of the 7th Pay Commission from January 2027.

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According to Ghosh, issues relating to pay disparities among state government employees, including temporary workers, were discussed during meetings with the government. He added that the chief minister had proposed regular consultations between the administration and employee organisations, and a framework for such discussions is currently being worked out.

Apart from the DA hike, the maiden budget also included several welfare and employment measures. The government announced plans to fill one lakh vacancies in various departments, aiming to strengthen public services and generate employment opportunities.

A substantial allocation of ₹36,000 crore was earmarked for the Annapurna Yojana, a financial assistance scheme targeted at women. In addition, the government set aside ₹550 crore for the free bus travel scheme for women and announced the introduction of a 'Pink Card' aimed at enhancing benefits for female commuters.

The budget signals the new government's attempt to address long-pending employee demands while simultaneously expanding welfare programmes and employment opportunities across the state.