Low on revenue, govt may cut pay

Low on revenue, govt may cut pay

BV.Shivashankar@timesgroup.com

15.07.2020

Bengaluru: If the government is forced to extend the week-long lockdown beyond July 22 to get a grip on the pandemic, it will have to consider pay cuts for its employees to finance the fight.

The state has 6.5 lakh employees and the government spends about Rs 5,500 crore per month in salaries and pensions. Besides this, the government has to service debts and allow for aids and subsidies, which means it needs a bare minimum of Rs 8,500 crore per month. An extended lockdown will make payment of salaries and pensions a tough task in the months ahead.

However, revenue in July so far has been about Rs 3,200 crore and the finance department is concerned it may not get much more because of the lockdown. It will have no other recourse but austerity measures. “We will have to consider pay cuts if curbs are extended,” said an official in the finance department.

He said, currently, mobilising funds to tackle Covid is not a problem. Except Covid operations, the government has already frozen funds for all development projects and has withheld hike in dearness allowance till June 2021. But it needs to do more to rein in the fiscal deficit. Legislators too will have to sacrifice perks and privileges.

The state was battered by the nationwide lockdown, but the economy showed signs of recovery with June fetching Rs 6,710 crore through commercial taxes – marginally higher than the same month last year. Other heads also showed growth in July.

While SR Viswanath, the CM’s political secretary said, “Yediyurappa is not in favour of extending the lockdown nor is he considering cutting salaries for now. But it all depends on how the Covid situation pans out.”

However, epidemiologist Dr Giridhara Babu said nothing would be gained by a weeklong lockdown.

SR Viswanath, BSY’s political secretary said, “The CM Is not mulling salary cuts now, but it all depends on how the situation pans out.”