Barely managing to pay salaries and pensions of government employees and struggling to release money for other committed liabilities, the cash-strapped Parkash Singh Badal government on Saturday announced to set up the sixth Punjab pay commission for its employees and pensioners.
The decision comes close on the heels of a slew of sops and steps the Badal government had announced in the recent past to defuse the public ire against its nine-year rule.
The decision to set up the pay panel was taken by Badal at a meeting with the representatives of various associations of governments, boards and corporations at Punjab Bhawan in Chandigarh on Saturday, according to an official spokesperson.
However, the chief minister did not spell out the modalities of the pay commission, including its composition, terms and conditions. “The terms and references of the pay panel will be finalised shortly,” the spokesperson said.
But, the financial health of the government is such that the revenue collection from value added tax (VAT) is alarmingly sluggish. Even the government has imposed many restrictions in releasing money to the employees from their general provident fund (GPF). On the other hand, income tax of CM Badal and his cabinet ministers—pertaining to their salaries—is paid from the consolidated funds.
During a recent high-level meeting held to review the VAT collection and other fiscal targets achieved, it came to the fore that the VAT collection had dipped alarmingly and the budgetary estimate of generating nearly Rs 18,000 crore from VAT—the main stay of revenue collection—was appearing beyond reach.
Government sources say the revenue generation from VAT in the first six months of this fiscal was about Rs 7,000 crore, while tax collection from areas such as procurement was nearly Rs 200 crore less than that of last year.
In another example of the government’s increasingly pale financial health, Badal on Saturday also announced that the long-pending instalment of 6% of dearness allowance (DA) for government employees and pensioners/family pensioners due from July 1, 2015, would be paid from January 2016.
As the government is yet to pay the DA arrears, finance minister Parminder Singh Dhindsa said the “pending arrears of DA from January to June 2015” would be paid in the next two months.
As unrest is also growing among government employees whom the government is not releasing money from their GPF, the finance minister said all bills related to the withdrawal of GPF of the employees had been cleared till August 2015. Now, the payment of GPF from September would be made soon by government treasuries, Dhindsa said.
Not only this, now the officials are struggling to fund the recent populist ‘Mukh Mantri Tirath Yatra Scheme’—free pilgrimage to sacred Sikh, Hindu and Muslim shrines. Under this move, the state government will organise free trains for people from Punjab, apart from other logistic facilities.
Government sources say the departments tasked to implement the free pilgrimage policy are struggling to put in place a comprehensive plan to launch the scheme from January.