THIRUVANANTHAPURAM: The state government will face an added burden when about 11,000 employees retire from service this month. It will have to spend about Rs 3,400 crore for the payment of their retirement benefits.
Every year, May sees a high number of retirements, presumably due to a practice in the past in which parents recorded the month of birth of children as May, ahead of school enrolment, irrespective of the actual month.
In May 2021, 9,278 people had retired from government service. The total number of retirements this year would be about 17,000 which would cost an approximate Rs 5,500 crore as retirement benefits, said a source in the finance department.
The government can meet the additional expense despite the current crisis, according to Finance Minister KN Balagopal. "The present constraint is due to the Central government’s cut on grants and also the restriction on borrowing. But it has not brought all development and welfare measures to a standstill. For example, the social security pension payment is being made now," he told The New Indian Express.
The minister said retiring employees will get their benefits as in the previous years.
"Moreover, it is not a payment at one go but a little bit scattered. Also, many of them would prefer depositing a good portion of the money in the treasury. The Centre has not finalised the borrowing limit for the state in the current financial year. The Union government is delaying a decision on it, thereby challenging the people of Kerala," Balagopal said.
Pension share going up
The share of employees' salary in total revenue receipts declined from 39 to 34 per cent between 2013-14 and 2018-19. But the pension payout did not see a corresponding decline. "The pension share is bound to increase till mid-2040s by which time almost all those who joined service before 2013 would retire. Somewhere along the way, the pension share is likely to become larger than the salary share," says the 11th Pay Revision Commission report.
