The Punjab cabinet on Monday decided to continue its three-year-old policy of giving two-year extension to the employees after they superannuate at the age of 58 years, putting at rest the widespread speculations that the Parkash Singh Badal government was likely to withdraw the decision.
However, the new feature of the fresh decision is that the employees will get post-retirement benefits --- gratuity, pension and provident fund — after the completion of their extension period.
Also, government employees seeking extension will only get the last salary drawn on attaining superannuation plus the Dearness Allowance (DA), sources told Hindustan Times.
“The cabinet decided that government employee seeking extension would not be eligible for any promotion and annual increment during the extension period,” said a government spokesperson in a press statement.
The employees opting for the voluntary extension in service will also not be entitled for benefits, if any, under the new pay scale. Nor they will come under the ambit of the next pay commission recommendations. Also, such employees will be barred from seeking benefit of assured career progression scheme (ACP or 4-9-14)
“The government has tweaked the policy slightly and will save Rs 1,250 crore per annum,” a key government functionary said.
By this move, the cash-strapped SAD-BJP government has again attempted to defer the payment of retiral benefits. Due to the continuous precarious fiscal health, the state government has been trying to defer the liabilities and save some money, which otherwise, had to be released to the retiring employees in the form of gratuity and provident fund.
At the core of Punjab government’s decision to give service extension to employees is the worrying issue of salary, wages and pension bill that is proving to be a huge burden on the state exchequer.
As per official figures, over Rs 21,000 crore is the annual salary, wages and pension bill. This eats up bulk of the state’s revenue receipts as near Rs 20,000 crore comes from the VAT which is the biggest source of revenue for the government. It was in September 2012 that the government decided to offer an option of re-employment for the period of one year to all its retiring employees. Later, it was extended to two years.
There were reports doing the rounds that government could reverse the decision in view of the impending pay commission in January 2016 and that employees on extension could stake claim for financial benefits.