THIRUVANANTHAPURAM: The budget announcement by Finance Minister K N Balagopal to constitute the 12th Pay Revision Commission, with just months remaining before the expiry of the government’s term, has triggered sharp criticism from policy experts and cautious reactions from government employees.
Experts argue that the move is more symbolic than substantive, pointing to the heavy fiscal burden already created by the 11th Pay Revision Commission in 2021, which added an immediate annual liability of Rs 4,810 crore. Salaries and pensions together now consume more than half of Kerala’s revenue receipts, salaries account for nearly 30% and pensions another 21%. In practical terms, for every Rs 100 the state earns from taxes and central grants, over Rs 50 is spent on just 10 lakh employees and pensioners, who represent only about 3% of the population.
Economist Jose Sebastian, formerly with the Gulati Institute of Finance and Taxation, observed that the government traditionally sets up a commission a year before its term ends, enabling it to announce revisions before elections.
“This time, the financial situation is far more precarious. The commission is likely to be ad hoc, headed by senior officials, and may recommend only minor increases. The burden will inevitably fall on the next government, which may delay or dilute implementation. In reality, the announcement is more about appeasing trade unions than addressing fiscal realities,” he said, adding that the model code of conduct will soon render the report irrelevant.
Kerala already tops the list among 17 major states in salary and pension expenditure as a share of revenue. While the average for salaries is 28.49%, Kerala spends 38.70%. For pensions, the average is 12.22%, but Kerala’s figure is 22.87%. Together with interest payments, these committed expenditures form 80.33% of revenue, compared to the national average of 55.21%. With revenue receipts projected at `1.83 lakh crore, the combined salary and pension bill is expected to exceed `90,000 crore in 2026-27.
Government employees view the announcement with suspicion. “This budget is nothing but a gimmick to win votes. The delay in implementing the revision due in July 2024 shows there will be no real relief during this government’s tenure,” said Manikandan P, secretary of the Government Employees Unity Forum, announcing a state protest meeting in Ernakulam on February 28.