Hyderabad: At a time when employees across most sectors in the economy are facing job losses, salary cuts and other losses owing to downsizing and slowdown of the economy, unrealistic state government employees of Telangana are trying to pressurise the government into parting with a huge part of its revenues to support an extraordinary salary hike.
The government, led by Chief Minister K. Chandrasekhar Rao, known to be highly benevolent towards trade unions and government employees, is trying to creating a fine balance between public sentiment against unfairly high rise in salaries and public expenditure, and the nagging employees who wish to use the situation and resort to emotional blackmailing.
Telangana employees unions, reminding themselves of the high fitment of 43 per cent that Chief Minister Rao had extended soon taking charge of the state government in 2014, beyond even the expectations of workers, are expecting an encore.
Given the overall state of the economy and reduced allocations to Telangana in the union budget, and anticipation of high expenditure on health with the Covid crisis not fully over, experts are of the view that the government should give a very nominal hike.
In fact, the pay revision commission (PRC) had recently recommended a 7.5 per cent fitment (hike on basic pay), the lowest so far, citing financial crisis. However, employees unions rejected the PRC report, saying they have confidence in Chief Minister Chandrashekar Rao, a government employee-friendly CM, and are demanding a high hike.
The government is now discussing the pros and cons over implementing the new PRC scales, including its feasibility. Officials are talking about how given the Union budget, based on 15th Finance Commission’s recommendations, Telangana will lose money from Central allocations, besides losing revenue from the newly imposed agri cess.
For the state government, even to extend a 7.5 per cent fitment as recommended by the PRC will impose an additional burden of over Rs 2,500 crore per year. Salary and pensions burden of the state government has already reached alarming levels, as they account for 55 per cent of the total revenue earnings of the state.
Officials have now placed the PRC ball into the Chief Minister’s court, but no decision has been taken yet. Chief Minister KCR had appointed a committee led by Chief Secretary Somesh Kumar, and comprising principal secretary, finance, K Ramakrishna Rao and principal secretary, water resources department, Rajat Kumar to hold consultations with employees unions on the PRC recommendations. The committee held talks for four days from January 27 with the unions but failed to convince them for accepting a 7.5 per cent fitment, which the union leaders dubbed was “too meagre”.
The committee, which submitted its report to CM Rao on the outcome of the talks, left the final decision on the quantum of fitment to the state government to decide.
CM Rao, who is holding marathon meetings on the new PRC with senior officials to decide the quantum of fitment, is said to expressing anger over the “emotional blackmailing tactics” of employees unions in rejecting the PRC report and throwing the responsibility on him for extending higher fitment, despite fully aware of how the government is going through a severe crunch in the Covid pandemic times.
Chandrashekar Rao is believed to have asked employees unions why they demanded for setting up a new PRC when they had no regard for its report. He reminded that the previous PRC, constituted in undivided AP, had recommended only 29 per cent fitment in 2013 but he increased it to 43 per cent on his own in 2014, though employees demanded 42 per cent, because the economy and financial situation of the government at that time had permitted him to do so.
But in Covid times of salary cuts and job losses, extending salary hikes, whatever quantum it may be, itself was an adventure. Employee unions, instead of understanding the situation, were emotionally blackmailing him for a higher salary hike, he is reported to have said.
The salary and pension bill of the Telangana government was Rs 16,378 crore in 2014-15, when the state was formed. It shot up to Rs 28,748 crore the next year in 2015-16, after CM KCR announced the new PRC. At present, the salary and pensions burden on the state and taxpayers stands at Rs 35,282 crore.
This accounts for 55 per cent of revenue earnings, 43.3 per cent of total revenue expenditure of state government and 4.5 per cent of the state’s GDP (GSDP). Telangana and Andhra Pradesh are among the top five states in India, whose expenditure on salaries and pensions for government employees is the highest, when compared with revenue expenditure.
Punjab stands first by spending 49.3 per cent of revenue expenditure on salaries and pensions, followed by Kerala (48 per cent), Maharashtra (41.7%), Telangana (38 per cent) and Andhra Pradesh (37.9 per cent), as per 2016-17 statistics available with the finance department.