AP govt's salary Bill exceeds ceiling fixed by 12th Finance Commission

State govt was also forced to take up a recruitment drive in the recent past in the light of the growing number of retirements

About 40 per cent of the revenue expenditure, net of interest and pension payments, made by the Andhra Pradesh government in 2011-12 went to salaries and wages of government staff. This is way above the ceiling of the 35 per cent recommended by the 12th Finance Commission.

The salary Bill stood at Rs 26,800 crore out of the total revenue expenditure of Rs 55,807 crore in 2011-12, according to a report released on state finances by the Comptroller and General of India (CAG).

This represents an increase of 12.49 per cent over the previous year but the absolute numbers are far more than the assessment made by the 13th Finance Commission which is Rs 15,735 crore, the report said. Revenue expenditure, which is of non-plan nature, is based on the revenues the government receives in a particular year.

What’s more, the salary Bill was doubled in just four-years time as compared to Rs 13,243 crore in 2007-08. The same is expected to further go up in the near future  as the state government has already appointed the new pay commission to recommend the rise in salaries of government employees. The move is widely seen as an effort to keep the employees in good humour during the election year.

Adding to this, the government was also forced to take up a new recruitment drive in the recent past with a promise to fill almost 100,000 government jobs in the light of the growing number of retirements. The current strength of the state government employees is estimated to be around 1.2 million.

The expenditure on pension and other retirement benefits to the state government pensioners during the year was Rs 11,110 crore and represent 12 per cent of the revenue receipts for 2011-12, according to the report. While the salary Bill was marginally lower compared to the Budget estimates, the pension payments, on the other hand, had exceeded the estimated Rs 9,693 crore in the annual Budget.

The CAG, in its report, has also observed that the government had not estimated the yearly pension liabilities on actuarial basis resulting in this mismatch.