Tough to find funds to pay festival allowances, advance pay

The Finance Department is racking its brains to find a way to give the customary one-month’s advance pay to its employees and pensioners for the Onam festival.

“We experience this difficulty every year in September and December, when the government pays advance salaries and pensions for Onam and Christmas. But the outgo on monthly salaries and pensions has been increasing at a fast pace in recent times, its rate of growth being higher than the rate of growth of the overall revenue of the government,” a top official of the department told The Hindu on Sunday.

Now the monthly bill under this head comes to nearly Rs. 2,100 crore, which means the government has to find Rs. 4,200 crore for paying two-months’ salaries and pensions in September.

Additional bill

There will be an additional bill of between Rs. 500 crore and Rs. 600 crore on festival allowances, depending on the level at which the government will be announcing these for the employees, service pensioners and welfare pensioners, the official said.

On Thursday, the State notified the sale of government securities of 10-year tenure for raising Rs. 1,100 crore and the auction will take place on Tuesday.

The State this year has the permission of the Union government to borrow Rs. 12,000 crore and the borrowings from this permitted amount are being phased from the beginning to the end of the financial year in a judicious manner.

So there is a limit to which the State can exploit the loan option to surmount the Onam funds crunch.

Below expectations

Without discussing the figures, the official said the revenue from registration and stamps had been below the Budget expectations this year since transactions had come down.

Commercial taxes

Revenue from commercial taxes had been modestly buoyant.

The revenue from excise (liquor sales) had been poor since the start of the monsoon in June, apparently because there had been less work and income for a large section of the working-class consumers because of the heavy rains.


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