Uttarakhand govt stops payment of arrears

Over 200,000 employees and pensioners in Uttarakhand are facing the heat of the global financial crisis. A month after acceptance of the new pay commission report, the state government is now finding it tough to fulfil its own commitment of giving arrears to nearly 163,000 employees and 60,000 pensioners.

The problem is largely due to the absence of any budgetary provision for implementation of the new pay report. There is a slump in collection of taxes this year following the global financial meltdown.

In a new circular, principal secretary (finance) Alok Jain had asked all the departments not to make payment of arrears till the supplementary budget is met.

Official sources here said the government was expected to convene an Assembly session soon to pass the supplementary budget for the payment of arrears.

“Our main concern is that in case we make payment of arrears now, then it will be very difficult for us to give salaries to the employees since no separate budgetary provisions were made for the implementation of the pay commission report,” said Jain.

The Uttarakhand government last month decided to implement the new pay committee report that increases the salaries of its employees by 25 per cent and pensions by 40 per cent with retrospective effect from January 1, 2006.

According to an estimate, the state government would have to shell out Rs 1,500 crore for the payment of arrears.

While implementing the pay commission report, the government said the arrears of the employees would be deposited in their GPF accounts.

Under this provision, the government has committed that the 40 per cent of the arrears will be deposited this year and the rest in the next financial year.

The acceptance of the new wage report would put an extra burden of Rs 1,000 crore every year on the state exchequer.