Thiruvananthapuram: As the Kerala government nearly doubles the pay of its employees and government teachers from next month, it will have to earmark about 80 per cent of the revenue receipts to pay salaries and pensions.
The government has already said that the pay rise puts an additional burden of Rs 7,222 crore on the public exchequer.
The bill shoots over 90 per cent of the revenue receipts when the pay is raised with retrospective effect from July 2014.
Also taking into consideration the interest on the loans the government will be forced to take to implement the pay rise, this may even go beyond the revenue receipts.
The government currently spends 62 per cent of revenue receipts on pay and pension. The Finance Department will have to find Rs 602 crore in this year’s budget for paying the revised salaries for the remaining two months of the financial year.
The Kerala Pay Revision Commission, headed by Justice C.N. Ramachandran Nair, has estimated an additional burden of Rs 5,277 crore from the pay rise, but the Finance Department scrutiny put the figure at Rs 8,122 crore.
The department brought it down by Rs 900 crore to Rs 7,222 crore by striking out a few recommendations.
The Pay Revision Commission had recommended pay scales over third and fourth grades for several posts, as against the practice of allowing new vacancies in proportion to the existing pay scale.
The Finance Department has done away with this recommendation to save Rs 900 crore. The implementation of the new recommendations also means that a new group of officers would come under the Income Tax net.
In other words, a part of the money that the state raises to dole out to its employees ultimately land up with the Union government as taxes.