Retirement of Staff to Impose Huge Burden on State Govt

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Retirement of Staff to Impose Huge Burden on State Govt

When Telangana state was formed in 2014, the salary and pensions bill was Rs.17,130 crore. Fast forward to 2021-22, and that number has increased to Rs.48,809 crore due to salary and pension hikes extended by the BRS government over the last ten years.

The retirement of state government employees is posing a significant financial burden on the newly formed Congress government. In March 2021, the BRS government extended the retirement age of employees by three years, from 58 to 61, resulting in over 44,000 employees set to retire in the next five years. Each employee will receive a substantial amount in the form of retirement benefits, such as provident fund and gratuity, which the Congress government will have to manage during its five-year term.

Data from the finance department indicates that 8,194 employees will retire in March, followed by 9,213 in 2025, 9,231 in 2026, 8,917 in 2027, and 8,496 in 2028, totaling 44,051 employees retiring in the next five years for whom the state government needs to allocate funds in the budget to meet expenditure on retirement benefits.

The BRS government had promised to enhance the retirement age to 61 years in its election manifesto for the 2018 Assembly polls, but it was not implemented until March 2021. The decision to raise the retirement age was believed to be due to a severe cash crunch faced by the BRS government during the Covid-induced financial crisis in 2020 and 2021.

According to the White Paper on State’s finances released by the Congress government in the Legislative Assembly, the salary and pensions bill of the state government will increase to Rs.55,925 crore in 2023-24. Salaries will account for Rs.40,109 crore, and pensions for retired staff will account for Rs.15,816 crore, making up 35% of the state’s total revenue receipts.

The White Paper also revealed that the government is in dire straits due to alleged financial mismanagement of the previous BRS government, with the outstanding debt of the government shooting up to over Rs.6.71 lakh crore from 2014 to 2023.

The tenure of the pay revision commission of employees and pensioners ended in July 2023, and employees are demanding the constitution of a new PRC to hike their salaries and pensions. The Congress had promised to constitute a new commission if voted to power, and the wage bill of the state government is set to rise further if new PRC scales are implemented.

Telangana’s history is deeply rooted in its struggle for statehood, with years of political and social movements ultimately leading to the formation of the state in 2014. This significant milestone brought about various administrative and financial challenges, including the management of the state’s finances and government employee pensions.

Overall, the increase in the salary and pensions bill reflects the evolving financial landscape of Telangana and the ongoing efforts of the government to manage the state’s financial resources effectively while meeting the needs of its retired employees.

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