Thiruvananthapuram: The Kerala government may drop the move to deduct a month's salary of government employees in instalments beginning next month. If the state approves the borrowing proposal put forward by the Centre for GST compensation, it will be able to borrow an additional Rs 8,000 crore.
But if the central proposal is not approved, the state will not be able to hold on as it is already strained for resources. Hence, the state government seems to be more inclined towards borrowing more.
The government can avoid a salary cut if it gets Rs 8,000 crore. Its estimation was that it could temporarily save on the monthly expenditure of about Rs 2,600 crore, incurred on the salary of government employees, by resorting to the salary cut amid the financial crisis caused by COVID.
The government has already withheld one-month's salary of its employees in instalments between April and August. The Cabinet had decided that the deducted amount would be merged with the employees' provident fund next April. However, the government has not issued any order regarding this.
The Cabinet had also decided to return next April the deducted amount in cash to the accounts of those who do not have PF.
The Cabinet also directed that discussions should be held with employee organisations on returning the already deducted salaries and on how to proceed with the proposal to withhold one more month's pay. However, confusion remains on the proposal as the final discussion has not yet taken place.
