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Post bifurcation, the Telangana government is expected to end up paying about Rs 45 crore in the first year to the residuary state of Andhra Pradesh towards the adjustment of pension payments related to retired government employees.
The new state will be confronting with this peculiar situation as the amount of money being drawn by pensioners in the Telangana region is found to be a little below the population ratio, based on which the pension liability is to be divided between the two states.
According to the provisions of the AP Reorganisation Act, 2014, the expenditure on pension and pensionary benefits of those who retired before the appointed day of June 2 must be shared by the successor states of Telangana and residual AP in the population ratio of 41.62 per cent and 58.32 per cent respectively.
However, the finance department found that the money being drawn by those living in the Telangana region, including the state capital, was amounting to 39-40 per cent of the total pension liability. This effectively means the residual AP will end up with more pension liability, which needs to be compensated by Telangana. "This difference (actual liability and the share of liability based on population ratio) would be around Rs 45 crore which has to be paid to the residuary AP government," a senior government official said.
In line with this formula, the AP government issued orders on Thursday stating that while the pensioners should continue to draw their pension from the same treasury office even after the bifurcation, the Principal Accountant General will adjust the expenditure on pension and related liabilities based on the population ratio every month.
In the case of employees who are serving after the appointed day, the successor state shall bear the portion of the pension and pensionary benefits after the appointed day. The remaining portion prior to bifurcation will be shared by both the states in the same ratio, according to these orders.
While the latest figures regarding the number of pensioners and the pension liability were not immediately available, in October, 2013, there were about 570,000 pensioners drawing close to Rs 1,200 crore.
