Exchequer dries up, Punjab govt staff wait six days for salary

This year, it received compensation only for the first quarter of the current fiscal, post which the GST regime came to an end on June 30.

Officials said that the the Aam Aadmi Party (AAP) government has been paying salaries on time, ever since it came to power in March this year and this was the first time that wages had been delayed.

The state’s annual salary bill, as reflected in the current fiscal budget, is pegged at Rs 31,171 crore, or roughly Rs 2,597 crore every month.

A senior functionary of the government, requesting anonymity, said that the delay was due to the government investing Rs 1,000 crore to make money as interest for the state exchequer. “As it was about money for the state exchequer, we thought that the employees could bear with the government for at least a week. We have paid salaries to Class C and D employees on Tuesday evening. The rest will be paid on Wednesday.”

Class C and Class D employees, who are paid less than their Class A and Class B colleagues, usually get paid the first whenever the government is short of money, officials said.

On Monday, the Cabinet had given its approval to a new policy of adding a special cadre of employees to the existing strength by absorbing contractual and ad hoc employees. This would mean an extra burden of Rs 400 crore on state exchequer.

A fat bill of Rs 20,000 crore towards power subsidy is already staring at the state this year. This includes Rs 18,000 crore towards free farm power, subsidy to industries and meeting a poll promise of providing 300 units of power free every month to domestic users by the AAP government. An amount of Rs 1298 crore has been incurred by
waiving pending power bills of consumers until last December.

Besides the salaries and the power subsidy, which are the the two biggest burdens on the state exchequer, Punjab also has various other liabilities — Rs 20,122 crore towards interest payments, Rs 15,145 crore towards pensions and retiral benefits. Besides this, Punjab also has to pay Rs 27,927 crore towards repayments of advances and loans, and Rs 20,000 crore towards repayment of ways and means advances.

An official said that the AAP’s big ticket poll announcements had started to have an impact on the state’s finances, and the government was banking on the GST compensation that the Centre used to dole out for some relief. However, neither had the Centre accepted Punjab’s request of continuing with the GST compensation, nor had it convened the GST council meeting scheduled to take place in August.

“We are already concerned that next month we may not be able to pay salaries till the 15th. It is going to be a crunch situation. Let us see how we manage,” an official said.

Newsletter | Click to get the day’s best explainers in your inbox

The government is now banking on better collections. An amount of Rs 45,588 crore has been targeted from state’s own tax revenue, which is Rs 8,000 crore more than was expected last fiscal. The government also expects Rs 20,550 crore from GST, Rs 6250 crore from VAT and Rs 9,647 crore from excise collection. Also, the state is targeting a revenue of over Rs 9,000 crore from liquor.

Meanwhile, the government on Tuesday ordered the disbanding of the Social Welfare Board having 12 staff members. The employees have been shifted to other departments and the building would be used by BACKFINCO, which is running from a rented building so far.