The Himachal Pradesh government is set to release state employees’ salaries and pensions. Along with the pending 4 per cent dearness allowance (DA), the government will release all pending payments on 28 October .
The DA, which has been pending since 1 January, 2023, will be cleared alongside medical reimbursement bills.
The decision to disburse October salaries and pensions before Diwali was attributed to the festive season. The state government mentioned that earlier delays in salary payments were aimed at fostering financial discipline within the state.
The state government typically receives its Revenue Deficit Grant and tax share from the Centre in early September. The government previously explained that paying salaries on the first of each month often requires borrowing at a 7.5 per cent interest rate, adding financial strain. By deferring payments, the state reportedly saves around Rs 3 crore monthly, translating to Rs 36 crore annually in reduced interest payments.
Additionally, the state has seen 1.15 lakh employees opt for the Old Pension Scheme, while 1,364 have chosen the New Pension Scheme, with DA now extended to these employees as well.
The DA plays a crucial role in helping employees cope with inflation by offsetting the rising cost of living. This allowance, calculated as a percentage of basic salary, ensures that employees’ real income remains stable despite fluctuations in market prices. Particularly beneficial for public sector employees and pensioners, DA provides financial relief in times of high inflation, helping maintain their purchasing power.
