Uncertainty looms large over State employees and service pensioners as the Union Finance Ministry has rejected the State’s plea to ease the curbs on their cash withdrawals for a fortnight from December 1.
Though Chief Minister Pinarayi Vijayan and Finance Minister T.M. Thomas Isaac had apprised the Centre of its ramifications, it has not yet elicited a positive response from the Centre.
Of the around 5.5 lakh government employees comprising non-gazetted and gazetted officers and 50,000 police personnel, about 40 per cent draw their salary in cash from the treasury to meet their routine needs.
After customary deductions such as Provident Fund, loans and insurance, about 70 per cent of the employees draw almost 80 per cent of their salary within the first 10 days of the month to honour their financial commitments for the previous month.
This segment will have to bear the brunt of the Reserve Bank of India restriction on cash withdrawals.
A majority of the about 3.5 lakh service pensioners too tend to draw a lion’s share of their income mostly in the first fortnight of every month. The government would transfer the funds for the salary to banks and the treasury, but the beneficiaries can draw it only in instalments. These segments would have to change their priorities and make their payments in fits and starts.
Service organisations and their leaders were pinning their hopes on the State’s memorandum and hoped that the restrictions would be lifted at least for the first 10 days of December, but now they are dismayed.
According to NGO Union general secretary T.C.Mathukutty, service organisations had apprised the Centre of the problems that would arise on limiting the cash withdrawals during the initial days of the month.
“About 40 per cent of the employees still draw their salary in cash from the treasury and 60 per cent are linked to the Treasury Savings Bank. None of them would be able to meet their immediate needs in the wake of the restrictions. This would also affect the money circulation in the market. Once the buying capacity of the employees and pensioners is restricted, it would have a direct bearing on the local market and also on the tax collection. The Centre should have anticipated such issues before taking a political decision to turn down the State’s demand,” he says.
