T.N. has second highest salary, pension expenditure
Sanjay Vijayakumar Deepu Sebastian Edmond
CHENNAI, March 14, 2018 00:00 IST
State looks to rationalise the government’s workforce as a way to reduce revenue deficit
Tamil Nadu has the second highest expenditure on salaries and pensions among comparable peer States. Now, with over 14 lakh government employees, the State is looking to rationalise the workforce.
Last month, the State Finance Department passed a government order for the constitution of a staff rationalisation committee. The purpose of the committee is to evaluate the staff structure in various departments and identify non-essential posts, so as to reduce the revenue expenditure, and also to identify jobs that can be outsourced or contracted. The move is being opposed by the Opposition parties, and the Tamil Nadu Government Employees Association will be protesting on March 12, urging the government to withdraw the proposal.
The State government’s spending on salaries and pensions, as a percentage of its revenue expenditure, was estimated to be 40% between FY2016 and FY2018, according to data from ratings firm ICRA, making it the second largest after Maharashtra. As per the Budget estimates for 2017-18, the State’s salary and pension expenditure is pegged at Rs. 66,908.59 crore, excluding the impact of the Seventh Pay Commission’s recommendations.
What has complicated the State’s situation further is that it has been facing a revenue deficit for five straight years (FY2014-2018), also one of the highest among peer States. Tamil Nadu has said it will exceed its projected revenue deficit of over Rs. 15,000 crore for FY2017-18, upon implementation of the Seventh Pay Commission’s recommendations.
A revenue deficit situation arises when the State collects less than the expected revenue and its revenue expenditure exceeds its receipts. The situation forces the State to borrow more to meet its expenses. The State spends roughly Rs. 72,000 crore or 25% of its expenses annually on social welfare measures — one of the highest in the country. The higher spending on salaries, pensions and freebies means the State has little leeway to spend on infrastructure projects like roads.
Government sources told The Hindu that there was no other option but to look at rationalisation of the workforce. They also pointed out that Tamil Nadu cannot be compared with other States because of the huge size of government departments such as health and education, for instance.
Tamil Nadu has defended its spending on freebies, stating that it’s the reason why the gap between the rich and the poor is narrower in the State.
Sanjay Vijayakumar Deepu Sebastian Edmond
CHENNAI, March 14, 2018 00:00 IST
State looks to rationalise the government’s workforce as a way to reduce revenue deficit
Tamil Nadu has the second highest expenditure on salaries and pensions among comparable peer States. Now, with over 14 lakh government employees, the State is looking to rationalise the workforce.
Last month, the State Finance Department passed a government order for the constitution of a staff rationalisation committee. The purpose of the committee is to evaluate the staff structure in various departments and identify non-essential posts, so as to reduce the revenue expenditure, and also to identify jobs that can be outsourced or contracted. The move is being opposed by the Opposition parties, and the Tamil Nadu Government Employees Association will be protesting on March 12, urging the government to withdraw the proposal.
The State government’s spending on salaries and pensions, as a percentage of its revenue expenditure, was estimated to be 40% between FY2016 and FY2018, according to data from ratings firm ICRA, making it the second largest after Maharashtra. As per the Budget estimates for 2017-18, the State’s salary and pension expenditure is pegged at Rs. 66,908.59 crore, excluding the impact of the Seventh Pay Commission’s recommendations.
What has complicated the State’s situation further is that it has been facing a revenue deficit for five straight years (FY2014-2018), also one of the highest among peer States. Tamil Nadu has said it will exceed its projected revenue deficit of over Rs. 15,000 crore for FY2017-18, upon implementation of the Seventh Pay Commission’s recommendations.
A revenue deficit situation arises when the State collects less than the expected revenue and its revenue expenditure exceeds its receipts. The situation forces the State to borrow more to meet its expenses. The State spends roughly Rs. 72,000 crore or 25% of its expenses annually on social welfare measures — one of the highest in the country. The higher spending on salaries, pensions and freebies means the State has little leeway to spend on infrastructure projects like roads.
Government sources told The Hindu that there was no other option but to look at rationalisation of the workforce. They also pointed out that Tamil Nadu cannot be compared with other States because of the huge size of government departments such as health and education, for instance.
Tamil Nadu has defended its spending on freebies, stating that it’s the reason why the gap between the rich and the poor is narrower in the State.
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