BENGALURU: The cash-starved Karnataka government is expected to stop payment of the Dearness Allowance (DA) instalment to its employees on the lines of the Centre.
Sources said chief minister BS Yediyurappa held hectic parleys with officials on Thursday soon after the Union government announced the rollback of DA payable to central government employees and pensioners from January 1 this year.
The meeting also discussed the Kerala government’s move to cut employees’ one-month salary in six instalments. While senior officials are in favour of either deferring a portion of salaries or rolling back DA, the CM, who holds the finance portfolio, is said to be reluctant given his pro-employee image. “We have not taken any decision yet,” said a senior official from the finance department.
Earlier, the state was on the verge of deferring a part of salaries for three months owing to virtually nil monthly tax collection in April. However, the government didn’t go through with it after the Centre released Rs 1,678 crore as the first tranche of tax devolution and assured to pay special grants of Rs 5,495 crore as per the 15th Finance Commission’s recommendation.
“It was almost decided not to hold back salaries in any manner, but the chief minister is now under pressure with the Centre freezing DA of its employees. I will not be surprised if the CM decides to roll back DA,” said a source close to him.
The state government had hiked DA from 6.5% to 11.3% last October and sources said officials are advising the CM to roll back the hiked portion.
The state has about 6.5 lakh employees from various departments and aided institutions, and the government spends about Rs 5,500 crore per month towards salaries and pensions. Including debt servicing, interest payment and aids and subsidies, its monthly committed expenditure amounts to around Rs 8,500 crore. While the monthly target is pegged at Rs 10,407 crore as per the 2020-21 budget estimates, the tax collection in April is hardly expected to touch Rs 500 crore.
“We have not been told about DA rollback or salary deferment. We want to wait for the CM’s decision,” said CS Shadakshari, president, Karnataka State Government Employees Association.
Sources said chief minister BS Yediyurappa held hectic parleys with officials on Thursday soon after the Union government announced the rollback of DA payable to central government employees and pensioners from January 1 this year.
The meeting also discussed the Kerala government’s move to cut employees’ one-month salary in six instalments. While senior officials are in favour of either deferring a portion of salaries or rolling back DA, the CM, who holds the finance portfolio, is said to be reluctant given his pro-employee image. “We have not taken any decision yet,” said a senior official from the finance department.
Earlier, the state was on the verge of deferring a part of salaries for three months owing to virtually nil monthly tax collection in April. However, the government didn’t go through with it after the Centre released Rs 1,678 crore as the first tranche of tax devolution and assured to pay special grants of Rs 5,495 crore as per the 15th Finance Commission’s recommendation.
“It was almost decided not to hold back salaries in any manner, but the chief minister is now under pressure with the Centre freezing DA of its employees. I will not be surprised if the CM decides to roll back DA,” said a source close to him.
The state government had hiked DA from 6.5% to 11.3% last October and sources said officials are advising the CM to roll back the hiked portion.
The state has about 6.5 lakh employees from various departments and aided institutions, and the government spends about Rs 5,500 crore per month towards salaries and pensions. Including debt servicing, interest payment and aids and subsidies, its monthly committed expenditure amounts to around Rs 8,500 crore. While the monthly target is pegged at Rs 10,407 crore as per the 2020-21 budget estimates, the tax collection in April is hardly expected to touch Rs 500 crore.
“We have not been told about DA rollback or salary deferment. We want to wait for the CM’s decision,” said CS Shadakshari, president, Karnataka State Government Employees Association.
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