Govt. may take Ordinance route to clear legal hurdles

HC order on deferment of salary of employees

29/04/2020, N.J. NAIR,THIRUVANANTHAPURAM

The State government is likely to promulgate an Ordinance to clear the legal hurdles to its decision to defer the salary of government employees and teachers.

The Kerala High Court on Tuesday had stayed for two months the operationalisation of the government order to defer the payment of six days’ salary from April to August to fight the COVID-19 pandemic.

The Cabinet is likely to clear the draft Ordinance on Wednesday and set the ground for deducting the salary. The stay order was set to compound the fiscal woes of the government which was striving hard to garner resources for meeting its routine expenditure.

Inadequate funds

Finance Department sources told The Hindu that the ₹2,000 crore left at its disposal was grossly inadequate to foot the salary bill, leave alone the service pension and other expenses. The estimated outgo for salary and pension is ₹3,800 crore. Had the court not stayed the decision to defer the salary, the government would have saved ₹500 crore a month.

The returns from Goods and Services Tax for the month has been pegged at ₹150 crore, the revenue deficit grant from the Centre at ₹1,276 crore and a trickle of ₹574 crore from petrol cess and other sources.

Of the approved limit of ₹25,400 crore for the current financial year, the government has already borrowed ₹6,000 crore. On deciding to expend the ₹2,000 crore for clearing the salary and pension bills, the government would again have to opt for market borrowing to meet the other committed expenditure and the additional burden incurred by COVID-19.

Disbursal of full complement of the salary would still be a tough task. On deciding to promulgate the Ordinance, the government could buy time to decide its future course.