Kerala government owes Rs 37,500 crore to staff, pensioners

Sources in the finance department said the government recently spent about Rs 3,000 crore to give 2% DA and Dearness Relief (DR) arrears to employees and pensioners, respectively.

The Kerala government owes its employees and pensioners a whopping Rs 37,500 crore as outstanding Dearness Allowance (DA) and pay revision arrears. Image used for representation.

M S Vidyanandan

Updated on: 

12 May 2024, 7:50 am

 https://www.newindianexpress.com/states/kerala/2024/May/12/kerala-government-owes-rs-37500-crore-to-staff-pensioners

THIRUVANANTHAPURAM: As Kerala reels under acute financial crisis, its ripples have been felt among the government employees and pensioners in the state. The state government owes its employees and pensioners a whopping Rs 37,500 crore as outstanding Dearness Allowance (DA) and pay revision arrears. While DA arrears come to Rs 22,500 crore, pay revision arrears constitute the remaining Rs 15,000 crore.

Sources in the finance department said the government recently spent about Rs 3,000 crore to give 2% DA and Dearness Relief (DR) arrears to employees and pensioners, respectively. “After the latest disbursal, the outstanding DA came down from 17% to 15%. The combined impact on the exchequer on account of 1% DA and 1% DR was about Rs 1,500 crore. About Rs 22,500 crore is required for the balance payment,” said an official. Now, the DA and DR arrears are pending from July 2021.

Merging the DA arrears with the Provident Fund of employees would have helped the government defer the outgo. But the revised restrictions on open market borrowings make this option less attractive to it. “If the amount is merged with the PF accounts, it will result in a corresponding increase in the public account. As per the new norms, funds parked in the public account will be adjusted from the net borrowing ceiling,” the official said.

The pay revision arrears of staff and pensioners were to be disbursed in four instalments. While the employees did not receive a single instalment, pensioners received their third instalment last month.

‘Non-payment of arrears has hit staffers’ morale’

Economist Mary George said it is nearly impossible for the government to make this huge payout unless it takes earnest efforts for resource mobilisation.

“The government did nothing to collect the Rs 28,258 crore worth tax and non-tax revenue arrears stated in the CAG report. Non-payment of DA and pay revision arrears has affected the morale of employees. It will have an impact on the efficiency of the government,” said Mary George.

Finance Minister K N Balagopal was unavailable for comments.

Notwithstanding the arrears, the government had announced a hike in the DA and DR in March. It came into effect in April and is applicable for employees, teachers and All India Service officers. The DA for employees and teachers was hiked from 7% to 9%.

The DR for service pensioners also increased at the same rate.

Money matters

Rs 22,500 crore Dearness allowance and dearness relief arrears

Rs 15,000 crore Pay revision arrears

DA and DR arrears are pending from July 2021

Hike in allowances

The government had announced a hike in the DA and DR in March. It came into effect in April and is applicable to employees, teachers and All India Service officers.

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