Facing a financial crisis in view of the Sixth Pay Commission, the Uttarakhand government today sought a pre-devolution deficit grant of Rs 40,000 crore from the 13th Finance Commission.
“We have put up a memorandum in this regard before the commission. Let’s us hope for the best,” said Chief Secretary IK Pande following a meeting between Chief Minister BC Khanduri and 13th Finance Commission Chairman Vijay L Kelkar here. The grant would mainly cover for a period of five years (2010-15).
“The meeting was very positive,” Pande said.
The government’s worries have compounded after it extended the benefits of the sixth pay panel to its nearly 200,000 employees. For paying the arrears and increased salaries till March 31, 2009, the government has to bear a burden of Rs 4,000 crore.
On the other hand, the list of pensioners is ballooning fast in the state with the addition of 114,000 more persons during the past two years. Before the BJP government came to power in 2007, the total number of pensioners in the state was only 172,000 that has already unbalanced the non-plan expenditure.
But experts said the financial crisis is likely to be more severe in 2009-10 when the government would pay 60 per cent of the arrears. This will again jeopardise the plan size, which includes various infrastructure and social sector projects of the state government as the non-plan expenditure gets heavy.
The Uttarakhand government in October decided to implement the new pay panel report, which increases the salaries of its employees by 25 per cent and pensions by 40 per cent with retrospective effect from January 1, 2006. According to an estimate, the acceptance of the new wage report would put an extra burden of Rs 1,500 crore every year on the state exchequer.
