Thiruvananthapuram: The Kerala finance department has suspended the disbursal of leave surrender benefits for state government employees for next three months. The step was taken as the government is struggling to find funds for disbursing next month's salary.
The money would be disbursed when the finances improve. The treasury directorate has communicated the order to all treasuries over the phone.
Even if the DDOs submit the leave surrender bill, the money would not be disbursed from the treasuries.
However, certain officials of the finance department withdrew the money from the sub-treasury at the Secretariat on Thursday afternoon, just before the order was issued.
The government has been meeting the expenses for a month through borrowings. About half of the Rs 5,936 crore, mobilised through the auction of debt bonds, was used up for disbursing the welfare pension.
All the bills with the local bodies would be settled from Saturday, which is the last day for submitting bills.
Bills worth Rs 2,200 crore have been submitted so far. Once these bills are settled, the treasury would be left with limited funds.
The government plans to borrow from the market for the second time this financial year to meet the fund shortage.
Availing of loans at 8.96 per cent interest had backfired earlier. Therefore, borrowings in smaller amounts would be made over multiple instances.
The government is reportedly considering giving only half the salary in the beginning of the next month.
Meanwhile, the cabinet meet on Thursday did not discuss the salary challenge of the government employees and teachers. The next meet is on Wednesday.
