Punjab Chief Minister Bhagwant Mann on Wednesday announced an additional 3 per cent dearness allowance (DA) for government employees and pensioners ahead of Diwali, calling it a gift for 8 lakh beneficiaries.The announcement has come at a time when the state’s outstanding DA and dearness relief (DR) arrears payable to employees and pensioners have mounted to Rs 22,818 crore, with the issue also pending before the Punjab and Haryana High Court.“I am giving a Diwali gift to 8 lakh employees and pensioners. They will get an instalment of 3 per cent DA. They are the backbone of the government. This is good news for them,” Mann said, while addressing the media on Wednesday.The decision will entail a fiscal liability of approximately Rs 380 crore for the remainder of the current financial year and around Rs 1,000 crore annually from April 2027. “The government is always ready to meet the demands of employees,” Mann said, adding that his government had provided 71,777 government jobs.With Wednesday’s announcement, the government has announced DA increases totalling 11 per cent this year. Two instalments of 4 per cent each had been announced earlier, taking the DA rate from 42 per cent to 50 per cent. The latest 3 per cent hike will take it to 53 per cent. It will be credited with November’s salary, the CM said.Also Read | DA hike cleared for central government employees ahead of Diwali“When we took over, employees were getting 28 per cent DA. Now they will get 53 per cent DA. For the first time, they have received an 11 per cent DA increase in a single year,” Mann said.He said the total annual financial liability arising from the increase announced this year would be Rs 3,988 crore.Story continues below this adOn September 23, the Finance Department had issued orders for the earlier 8 per cent increase, providing for the revised rate with effect from September 1. Employees and pensioners received the benefit along with their September salary and October pension.Punjab’s outstanding DA and DR arrears payable to government employees and pensioners have reached Rs 22,818 crore for the period from January 1, 2021, to September 30, 2026. Matching the Centre’s DA rates would impose an additional annual burden of Rs 4,712 crore on the state exchequer.The financial implications of clearing the pending dues are even higher as the state government will have to pay 6 per cent annual interest on the arrears.Also read | Why Punjab AAP government is in a catch-22 situation on DA duesThe total outstanding liability of the state, taking the two pending liabilities together, has been estimated at Rs 32,418 crore.Story continues below this adThese figures have come to light in a report placed before the Punjab and Haryana High Court by Chief Secretary K A P Sinha, detailing the government’s financial obligations towards employees and pensioners.During 2025-26, Punjab spent approximately Rs 58,064 crore annually on salaries and pensions. The additional DA burden, along with the arrears and interest payable, would further increase the committed expenditure.Meanwhile, the issue of non-payment of DA arrears is pending before the Punjab and Haryana High Court. On Tuesday, the High Court issued a contempt notice to the chief secretary and sought his response by November 17.The contempt proceedings followed the government’s failure to clarify its position on the payment of the pending arrears.Story continues below this adThe government’s September decision to increase DA by 8 per cent, taking the rate from 42 per cent to 50 per cent, had provided relief to employees and pensioners. However, the revision addressed the DA rate and did not settle the accumulated arrears dating back to January 2021.