Covid-19: As state govts defer or cut pay, employees prepare for battle

Many states, facing a cash crunch, have deferred or cut salaries of government employees. Photo: PTI
State government employees in Kerala have announced that they will approach the Supreme Court after the Kerala High Court upheld a state government ordinance deferring their salary to meet expenses incurred in the fight against Covid-19 pandemic.

Government employees from other states are keenly watching this contest as they too look to oppose the moves by their respective governments to cut salaries. If state governments don’t address this in time, they could be sitting on political time bombs.

The Kerala government had to issue an ordinance after a single-judge bench of the high court annulled its order to cut salaries of employees.

The court agreed with the government’s contention that it has the legislative powers to bring such an ordinance during the extraordinary situation and posted it for further hearing on June 4. The government promulgated the ordinance on April 30.

While hearing a bunch of petitions questioning the ordinance, the government said it was not a salary cut but a temporary deferment of payment to tide over the crisis. It reiterated that this amount would be paid once the fiscal condition of the state improved.

“It is an extraordinary situation and the court cannot question the wisdom of the legislature in bringing out an ordinance, especially when the ordinance does not partake of a character appropriating the salary but deferring it for the time being, that too under the authority of law,” it observed.

The state government will collect Rs 2,000 crore from the move. But employees’ organisations affiliated to opposition parties said they would move the Supreme Court soon.

Many states, facing a cash crunch, have deferred or cut salaries of government employees. Taking a leaf out of the Centre’s book, the Karnataka government announced it would not pay additional installments of dearness allowances to its employees with effect from January 1, 2020.

The Telangana government was the first to announce that it was deferring paying 50 per cent of its employees’ salaries for March. The cut could continue for another month, maybe longer. Telangana’s monthly salary bill is around Rs 2,500 crore. The state employs around 400,000 people, including pensioners.

The Andhra Pradesh government also deferred 50 per cent of March salary payments to its employees and there was no clarity on when their full salary would be restored as the decision was in force “till further orders”. The Tamil Nadu government has frozen the payment of additional DA instalments and suspended earned leave encashment for a year.

Chief Minister Edappadi K Palaniswami said in Salem last week: “Nearly 61 per cent revenue of the state government is spent towards the benefit of 13 lakh (1.3 million) government employees.” He added: 

“Government employees have been protesting about various demands and some political parties are triggering their protests indirectly. For the welfare of government employees, the AIADMK government has implemented the 7th Pay Commission recommendations and sanctioned Rs 14,877 crore.”

Rajasthan Chief Minister Ashok Gehlot also announced deferment of 50 per cent of the salary of government employees and 30 per cent of state-government pensions but exempted policemen, class IV employees, health workers, doctors and contract workers.

However, some states ruled by the Bharatiya Janata Party (BJP) have been cautious about giving state government employees any cause to complain. Gujarat Deputy Chief Minister Nitin Patel said:

“Though there is a huge dip in our revenues, we have decided to pay full salary for April to our 5.28 lakh (528,000) state government employees. Similarly, full pension will be paid to 4.57 lakh (457,000) retired employees. This is being made possible because of our efficient (financial) management.” Gujarat would be spending Rs 2,600 crore towards salary and Rs 1,400 crore for pension for April, he said.

Himachal Pradesh, has ordered a pay cut for elected representatives but not state government employees. In his 2020-21 Budget presented in March, Chief Minister Jairam Thakur explained that of every Rs 100 in 2021, the government would spend Rs 26.66 on salaries, Rs 14.79 on pension, Rs 10.4 on interest payment, Rs 7.29 on loan repayment, and Rs 41.22 on development works and other activities.

The numbers explain the political muscle government employees enjoy in the hill state.


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