About half a million state employees here are threatening to go on an indefinite strike if their dearness allowance dues are not settled.

"The state government is obliged to give us dearness allowance as Chief Minister Mufti Mohammad Sayeed promised six months ago," said L.K. Puri, an employee leader, at a rally organised here Wednesday.

But the government, which needs Rs.30 million per annum to settle their demands, said it did not have the money.

"We don't have that kind of money," Finance Minister Muzaffar Hussein Beig told reporters. "It is for the centre to bail us out."

The central government however may not be in a mood to provide any more help, official sources told IANS.

It has already asked the state government to account for the Rs.12 billion given as a special grant last year.

Prime Minister Manmohan Singh announced a reconstruction plan costing Rs.240 billion for the state during his visit here last week.

Sources said union Finance Minister P. Chidambaram told state officials they would receive no more help until previous accounts are settled.

But the employees are not concerned with these differences.

"We only want our money. We are not concerned where the money comes from," said Puri.

--Indo-Asian News Service