U'khand brings supplementary budget for salary arrears

Despite the financial crisis, the Uttarakhand government today brought a supplementary budget in the state Assembly to pay the arrears of its employees under the Sixth Pay Commission.

Out of the Rs 1,468-crore budget, Rs 1,061 crore has been earmarked for non-plan which will mostly go as arrears to the employees. The remaining Rs 467 crore has been allotted for the plan outlay, Principal Secretary Finance Alok Jain said.

The move came as over 200,000 employees and pensioners in Uttarakhand were facing the heat of the global financial crisis as well as the heavy burden of the sixth pay commission on the state exchequer.

Significantly, the state government is finding it tough to fulfill its own commitment of giving arrears to nearly 163,000 employees and 60,000 pensioners.

This is largely due to the absence of any budgetary provision for the implementation of the new pay report. There is also slump in the collection of taxes this year following the global financial crisis.

The government earlier said that payment of arrears would be difficult till the supplementary budget is met. The state assembly session was mainly convened to pass the supplementary budget.

The state government in October decided to implement the new pay committee report which 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 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 would 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.