The Hindu : Arrears issue another worry

Online edition of India's National Newspaper
Wednesday, Mar 05, 2003

Southern States

Southern States - Tamil Nadu

Arrears issue another worry

By V. Jayanth

CHENNAI March 4. At a time when employees' associations are planning to resume and step up their agitation against `suspension' of benefits, the State Government will have a serious decision to make on repayment of `impounded arrears' due under Fifth Pay Commission recommendations. The Government is supposed to make the repayment in the 2003-04 fiscal, but its finances cannot provide for such a ``luxury''.

In 1998, the DMK regime, while implementing the Commission recommendations, impounded 60 per cent of the arrears of pay and allowances as also the pension and related benefits.

The Government held back Rs. 623 crores in arrears of pay and allowances and another Rs. 469 crores of pension to employees who retired during 1996-98. This was supposed to be repaid after a five-year term.

According to official sources, the liability mounted to a ``staggering Rs. 1,823 crores'' in 2003-04, providing for interest payable for five years.

The question is: Can the State afford to make this payment, when it has suspended many festival advance, bonus, encashment of earned leave and even an increase in dearness allowance.

``Though the financial position may be more manageable now than it was 18 months ago, there is certainly no scope for coughing up something like Rs. 1,800 crores in the coming year'', explains a senior official.

As such, the Government will have to take a policy decision on dealing with this `arrears issue'. It is doubtful whether any government can deny its employees what was promised.

The options before the Government, sources say, are either to stop interest payment on the dues or work out a schedule of phased payment through small savings instruments.

While deciding on this sensitive issue, the Government will also have to make up its mind on restoring bonus, festival advance and other benefits suspended for two years now owing to the fiscal crisis.

Though the Government has already introduced a new `contributory scheme' of pension for new recruits, it may not have any significant impact on the budget in the short-term, as there is also a partial freeze on recruitments.

There is concern over the rising salaries and pensions bill and the Chief Minister, Jayalalithaa, has gone on record, in the Assembly itself, wondering whether it is ``fair'' to ``pamper'' one section of employees alone.

Officials say the salaries bill rose steadily through the 1990s, making a quantum jump in 1998, when the Fifth Pay Commission recommendations were implemented.

The pension bill trebled from Rs. 1,070 crores in 1996-97 to Rs. 3,000 crores last year.

It remains to be seen whether the Government will take a policy decision on these issues or adopt an ad hoc approach, putting off the payment to ``better times''.

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