Govt requires Rs 25,000 cr to pay up dues; CM’s promise will put government in bind

Thiruvananthapuram: Despite the Chief Minister's promise to disburse promptly the arrears that are due to government employees, service and welfare pensioners, the government may find it challenging to meet the commitments given the current financial position of the state.
While releasing the government's three-year progress report recently, the CM stated that the arrears, including the Dearness Allowance (DA) to employees, Dearness Relief (DR) to service pensioners, and Welfare Pension dues, would be paid at the earliest favourable situation.

The finance department estimates that at least Rs 25,000 crore will be needed to clear all the dues. At a time when the government is struggling to find revenue to meet even its monthly expenses, paying these dues will incur additional expenditures. Currently, the chances of opening an additional source of revenue look very slim. Hence, the state is exploring the option of paying the welfare pension dues in instalments.

Earlier, the government used to temporarily relieve the obligation to pay DR and DA by merging them with the Provident Fund (PF). But, since the Central Government has started considering the funds in the PF as a liability and is cutting this in borrowing limits, the state can no longer pursue this option.
The state currently owes a total of Rs 18,000 crore in DA and DR arrears to its employees and pensioners, respectively. The latest announcement by the CM comes even as the state is struggling to find a way to pay these dues. Consequently, the government will have to find itself obliged to implement the CM's promise ahead of the by-elections in Wayanad, Palakkad, and Chelakkara, which are expected within the next six months.

The state currently owes five months of welfare pension dues from January to May. With demands to pay these dues coming from various quarters, including the LDF, the government is contemplating making this payment in three to four instalments. Additionally, the pension for each month will be paid promptly.
However, the government has yet to decide on paying the DA and DR for the time being as it keenly awaits the allocation of the finance portfolio in the new central government. The state government is hopeful that it will be able to address the current financial struggles to a great extent if the Telugu Desam Party (TDP) occupies the position.