The compulsory salary contribution to the Chief Minister's Distress Relief Fund for government employees and teachers has been withdrawn. The decision was taken at the Cabinet meeting held in Thiruvnanthapuram on Wednesday.
Finance minster T M Thomas Isaac was keen on persisting with the compulsory cut and had even put forward cushioned options that he hoped would induce employees to keep parting with their salaries without any major resentment; he had suggested a cut of 18 days as opposed to the 30 in force, a moratorium on provident fund (PF) loan and Onam advance repayment and even an interest-free loan scheme for the money deducted.
But the government had to drop the move after two pro-government outfits, Kerala NGO Union and Kerala Secretariat Employees' Association, expressed strong dissent, and rejected all of Isaac's proposals to somehow continue with the cut.
The increase in the borrowing limit of states, allowing Kerala to borrow an additional Rs 18,087 crore, and also the possibility of Kerala receiving over Rs 9000 crore as the GST compensation from the Centre could also have taken the urgency out of the salary cut.
An amount equivalent to a month's salary was mandatorily deducted from the employee's account over a period of five months, from April to August. This meant that every month an employee was deprived of six days' salary. This was unlike the 'Salary Challenge' in the wake of the 2018 floods as this was mandatory.
The move had freed up about Rs 2000 crore, approximately Rs 500 crore each month. Usually, the government requires nearly Rs 4000 crore (Rs 2400 crore as salary and Rs 1500 crore as pension) to meet the monthly salary and pension benefits.
As promised, the Cabinet has also decided to reimburse the money deducted during these five months. However, instead of paying back in instalments along with the monthly salary, the deducted amount would be merged with the employee's provident fund from April 2021 onwards.
It is said that the coming Assembly elections could also have motivated the LDF government to withdraw the salary cut. This is not in the sense of getting more votes, but more money. Here is what a Kerala NGO Union member said on the condition of anonymity: “The government has restored the original salaries so that both the CPM and the CPI could ask government employees to contribute generously to the campaign fund. Both the parties have already decided to mobilise election funds from members of affiliated unions.”
So what the government gave back, the Left parties could take back.