Under attack by the Opposition over delay in salaries of government employees, chief minister (CM) Sukhvinder Singh Sukhu on Wednesday announced that employees and retirees will receive their salaries and pensions on the 5th and 10th of each month, respectively.
In a statement to the state assembly on the seventh day of the monsoon session, Sukhu said the main reason for deferring salary and pension, which traditionally is disbursed on the first day of the month, is that the state government wants to use the financial resources judiciously by mapping the expenditure with the receipts, which is vital for the financial management of the government.
“The state government has to pay salaries and pensions on the first day of every month whereas the revenue deficit grant (RDG) of ₹520 crore and share in Central Taxes of ₹740 crore is received on 6th and 10th of every month, respectively. For the payment of salary and pension on the first date, the state has to bear the burden of unnecessary interest by taking an advance loan of 7.5% from the market,” Sukhu informed the House.
“Efforts have been made by the present government to map expenditure with receipts for fiscal prudence so the unnecessary burden of interest can be reduced,” he added.
{{/usCountry}}“Efforts have been made by the present government to map expenditure with receipts for fiscal prudence so the unnecessary burden of interest can be reduced,” he added.
{{/usCountry}}The CM said the government is advancing with fiscal prudence and discipline to overcome the economic crisis. “Each month, we disburse ₹1,200 crore in salaries and ₹800 crore in pensions, totaling ₹2,000 crore for government employees and retirees,” he said, adding that efforts will be made to disburse salaries on the first and a meeting will be held to discuss the issue again at the end of the month.
‘State will save ₹36 crore annually’
Further elaborating, Sukhu said the state does not have the ₹2,000 crore needed for salary and pension payments on the first day of the month and thus is forced to take loans at an interest rate of 7.5% to meet the obligations.
“For a loan spanning five days, the interest amounts to ₹3 crore. By deferring the payment of salaries and pensions, the government would save ₹3 crore monthly and ₹36 crore annually being paid as interest on loans,” he said. However, the CM outlined that this staggered payment of salaries and pension would not apply to employees and pensioners of boards and corporations as they can take decisions themselves after assessing their resources