Finance Minister T M Thomas Isaac seems to have followed through on his threat. More than a fortnight ago he had hinted that poor response to the Salary Challenge would force the government to adopt harsher measures.
Now, the Salary Challenge has been withdrawn. Instead, the Cabinet on Wednesday decided to make employee contribution to the Chief Minister's Distress Relief Fund compulsory.
An amount equivalent to a month's salary will be mandatorily deducted from the employee's account over a period of five months. Every month, for the next five months, the employee would be deprived of six days' salary. Salary Challenge was a kind of game that appealed to the sportsman spirit in a government employee. If they were not adequately moved, they could refuse to take part. But now, whether they like it or not, the contribution has to be made.
However, for those drawing a salary less than Rs 20,000 or the lowest in the salary hierarchy, it will not be made compulsory. This spares employees with a basic pay of Rs 8,500. However, the 'spare limit' is so low that even a sweeper or a cook with a service of ten years and drawing a basic pay of only Rs 12,220 would not be exempted.
As if to soften the blow, sources said the Cabinet would promise employees that the amount would be returned once the economy got back on track. How long this would take is anybody's guess as even the most optimistic estimates say it would take another five years for the Kerala economy to get back to even the pre-2018 levels, leave alone the healthier 2013 levels.
In another move, the government decided to cut 30 per cent salary of all people's representatives, including ministers, board chairpersons and panchayat members, for a period of one year.
As for the impact on the employees, the latest salary cut could be harsher in the short term. Last time, employees were given the option to contribute their one month's salary over a period of 10 months. Then, they lost only three days' salary each month for 10 months. Earlier, there were other options, too. If the monthly cuts were hard to bear, the employees were allowed to surrender an amount equivalent to their one month's salary in the form of their earned leave, or salary or dearness allowance arrears.
A week ago Finance Minister Thomas Isaac had hinted at this harsher strategy but he was misunderstood. He had said the Salary Challenge was unfair because only some people contributed while the others refused. “Some employees were left to bear the brunt while the others refused to contribute,” Isaac had said. This was widely interpreted to mean that the government was not too keen to go ahead with the Salary Challenge. Fact was, Isaac was preparing the ground to distribute the salary cut shock equally.
A this point, it is also not clear whether the government intends to exempt the COVID-19 warriors, notably health workers and the police, from the salary cut. A top government source also hinted that employees in the lower income bracket could also be spared. "This is a politically risky move. So the government would give some socialist spin to the salary cut to take away its sharpness," the official said.
By making the contribution compulsory, the government intends to mobilise over Rs 3,500 crore. The 2018 Salary Challenge had brought in just Rs 1,220 crore. Earlier, there were plans to defer the payment of the DA and other arrears of employees but it was felt such a move would not fetch even Rs 1,500 crore.
