KSEB’s 2021 salary, pension hike against norms: CAG

Thiruvananthapuram: The Comptroller and Auditor General (CAG) has come down heavily on the Kerala State Electricity Board (KSEB) for revising salary and pension in 2021 without the approval of the State Government.

Strict action should be taken against the Board of Directors who revised the salaries in violation of all the norms, the CAG ordered.

The salary and pension revision would cause an additional burden of Rs 15,184 crore, which in turn would result in an additional charge of up to Rs 6.46 per unit on consumers, the CAG noted.

The additional liability should be deducted from the financial assistance given by the Energy Department to KSEB, the CAG has directed.

It has asked the Government to ensure that KSEB employees do not get more salary through the pay revision than what the government employees are drawing. The draft report handed over to the government will become a public document when it is placed on the table of the Legislative Assembly.

Excerpts from the report

The KSEB has been repeating the implementation of the pay revision according to its likes, despite repeated warnings by the State Government, the Finance Department, and the CAG. Due to the unauthorized increase in salaries and pensions, these expenses, which were 23 percent of the income, jumped to 46 percent in one go. Due to the increase in salaries with a retrospective effect from July 2018, Rs 1,011 crore had to be paid as arrears. Thus, the long-term liability created is worth Rs 15,184 crore. Since KSEB's job is only to sell electricity, the money for the extra salary can be found only by increasing the tariff rates.

The Board resorted to the new revision in 2021 even though the pay revision implemented in 2016 had not been approved by the Government. Without even considering the fact that it is a loss-making company, the wages were increased at a higher rate than what is paid to government employees. The Energy Department, which was supposed to intervene in this, turned a blind eye to everything. While State Government employees get only 7% Dearness Allowance (DA), the KSEB has sanctioned 5% more DA. A total of 19% DA is paid. Due to this, the additional liability is Rs 191 crore per annum.

While the salary scale of a driver in the government department is Rs 27,900-63,700, the revised salary of a KSEB driver is Rs 36,000-76,400. The board implemented this reform at a time when, as of March 2020, it was incurring a loss of Rs 6,498 crore. The pay revision was implemented when NS Pillai was the KSEB Chairman. B Ashok, who later took over as chairman, had opposed the revision of the salary without the Government's approval.