Kerala: Government in crisis as Rs 9,000 cr required for benefits to 16,000 retiring employees this year

By Aishwarya Nair | First Published May 17, 2024, 10:49 AM IST

Amidst financial strain, Kerala faces the challenge of disbursing retirement benefits for around 16,000 employees retiring this month, amounting to approximately Rs 9,000 crore.

Thiruvananthapuram: Amid a severe economic crisis, the state finance department in Kerala is tasked with finding Rs 9,000 crore for collective retirement benefits of employees this month. Although rumors suggest an increase in the pension age, the government has not confirmed this. Kerala has expressed its concern to the Centre regarding the non-determination of the loan limit for the first quarter of the financial year.

The state has been in overdraft since earlier this month, facing a financial crunch. Although it was announced in the budget that pension payments for the respective month would begin from the current financial year, this action has yet to commence. Mass retirements are underway, with approximately 16,000 employees expected to retire from government service this month, necessitating around Rs 9,000 crore for benefits. The Finance Department's only hope lies in the delay of completing pension benefit procedures. Furthermore, if welfare pension payments are included, arrears could extend up to six months. Amidst the economic crisis, rumors regarding an increase in the pension age are circulating, although the Finance Department clarified that no official discussions have occurred on this matter.

Tap to resize

Latest Videos

The local elections are scheduled for next December, but there's emerging political opinion favoring an increase in the pension age by at least one year. However, the policy decision rests with the LDF, which needs to deliberate on the matter first. The state's debt ceiling for the current financial year is Rs 37,512 crore. Typically, the Union Finance Ministry sets the limits for the first quarter up to December for states in early May, but as of now, no notification has been received. The state government had requested an advance of Rs 5,000 crore until the loan limit was fixed, but the Centre provided only Rs 3,000 crore.

For more reliable and latest news