Kozhikode: Chief Minister Pinarayi Vijayan, on a whirlwind tour of all 140 assembly constituencies as part of his 'Nava Kerala Sadas' campaign, repeatedly dishes out numbers to explain how the Union government has squeezed the state by withholding money due to the state. 

On Sunday, November 27, speaking at Mukkam in Kozhikode's Thiruvambadi constituency, Vijayan said the state government has to get Rs 750 crore from the Union government as part of the UGC salary revision of university and college teachers. "By March 31, 2022, we informed the Union government that this money has been disbursed. We have to get (50% of) the disbursed money," he said in his speech. "Officials of the State government held talks with the officials of the Union government. But the arrears have not been settled," he said.

The Chief Minister was replying to Union Finance Minister Nirmala Sitharaman who said “not one rupee” due to the state government being held by the Centre. Speaking in Thiruvananthapuram on Saturday, Sitharaman specifically touched on the pay revision arrears of teachers of higher education institutes in Kerala. She said, "The Kerala government sent a proposal which had a lot of unanswered questions. They were asked to correct all that and send back (the proposal) by March 31, 2022." 

The Union government did not receive the complete proposal before March 31, 2022. "It may not be possible now to release the Central share because you have not sent the complete proposal," Sitharaman.

In other words, around 10,000 teachers of state universities, affiliated and government-funded colleges, law colleges, engineering colleges, agricultural university, animal science university, fisheries university, technological university, medical, dental, nursing, and pharmaceutical colleges, polytechnics, physical education, and librarians are likely to lose around Rs 1,500 crore of arrears pending from January 1, 2016, to March 31, 2019 -- which comes to 39 months.

Onmanorama fact-checked the Union Finance Minister and Chief Minister's statements and counter statements and found that Pinarayi Vijayan was not truthful though the Union government bent rules to make it difficult for the state government to meet the financial commitments.

On November 2, 2017, the Union Ministry of Education's Department of Higher Education wrote to the University Grants Commission saying it would implement the recommendations of the 7th Central Pay Commission (CPC) on January 1, 2016.

The same letter said the Union government would provide financial assistance to State governments to implement the pay revision "by way of reimbursement to the extent of 50%" of the additional expenditure involved.

The 50% financial assistance shall be provided for the period from January 1, 2016, to March 31, 2019, the letter said and added that there would be no central assistance thereafter.

On April 1, 2021, the state government, reeling under a severe financial crisis, issued an order to implement the pay revision from April 1, 2019, and it gave the arrears for the two years to the teachers. For the previous 39 months, that is from January 1, 2016, to March 31, 2019, the state government decided to seek 50% central assistance to clear the arrears.

But since the Union government's financial assistance is a "reimbursement scheme", the state government resorted to some financial jugglery. 

On May 28, 2020, it issued a government order saying its actual financial commitment to implement the 7th UGC Pay Revision from January 1, 2016, to March 31, 2019, was Rs 2,123.04 crore, and the Union government would reimburse Rs 1,061.52 crore, that is 50% of the amount.

The same order said the State Government would deposit the money to the teachers' General Provident Fund accounts, and the money could be withdrawn in four instalments in January 2023, July 2023, January 2024, and July 2024 with usual GPF interest rates. "(The) government are, therefore, pleased to accord sanction for the release of the arrears of the 7th UGC Pay Revision and to credit the amount to the individual GPF account of the teachers," it said.
But the money was never deposited. 

The Union government has a form called Format II to claim the reimbursement. It sought an undertaking saying the state government has released the said amount to teachers as payment of arrears. But Kerala's additional chief secretary Venu V gave an undertaking saying the state government has "decided to release" Rs 1501.60 crore to the teachers of State universities and colleges as payment of arrears.

That could be the reason why Union Finance Minister Sitharaman said that the Kerala government was asked to furnish a complete (reimbursement) proposal.

On January 21, 2023, the State government issued another order to withhold payment of arrears citing an unconducive financial position.

The order issued by the Finance Department cited eight government orders issued from June 29, 2019, to February 16, 2021. It said: "The above government orders contain directions regarding disbursement of arrears on account of pay revision on which, the instalments of arrears are to be disbursed with effect from January 1, 2023 onwards. But the reimbursement of central share of arrears from UGC/ AICTE has not been received yet due to some technical reasons."

"The present financial position of the state is also not conducive to disbursing pay revision arrears. In the above circumstances, the government hereby orders that the instalments of arrears on account of the 7th Pay Revision under the UGC/ AICTE scheme to various categories of employees and teachers... due for payment from January 2023 onwards are withheld till the position of State finances improves or government issues further necessary directions/ orders in this regard," it said.

Dr Shino P Jose, president of the Kannur Regional Committee of Kerala Private College Teachers' Association confirmed that the state government had not released the arrears as claimed by the Chief Minister in Mukkam on Sunday.

Onmanorama contacted the Higher Education Principal Secretary Ishita Roy for comments. The report will be updated when she replies.

On July 27, 2022, the Union Ministry of Higher Education wrote to the Higher Education Secretaries of states saying it closed the financial assistance reimbursement scheme on March 31, 2022, after several extensions.

The letter said that it sent reminder letters on February 22 and March 20, 2022, saying the 50% central share was only eligible as reimbursement but several states sent proposals that were "not complete or correct" as per this Ministry's order.

To be sure, the financial assistance for the 6th Pay Revision Arrears was not a reimbursement scheme. The Centre decided to switch to 'reimbursement mode' after seeing the lag in disbursement of the arrearsof the 6th Pay Commission revision, said Shino Jose. "Centre noted that many states were not disbursing the arrears to the beneficiaries despite receiving the funds on time. This prompted it to move to 'reimbursement' in the 7th pay revision order," he said.
Kerala adopted the UGC pay revision in the last days of V S Achuthanandan government in 2010 and the arrears were cleared in four instalments from 2013 to 2016.