The Pinarayi Vijayan- led LDF government in Kerala has revoked its plan of cutting one month’s salary of government employees and teachers to compensate for the financial crisis triggered by the COVID-19 pandemic. The decision to drop this controversial plan was announced in a cabinet meeting, chaired by the Chief Minister, on Wednesday.
During the meeting, it was also decided that the deferred salaries of these government staff and teachers will be merged with their Provident Fund (PF). The government had deferred six days’ worth of salaries for five months, from April to August this year, which will be merged with the employees’ PF on April 1, 2021.
According to reports, the government will also give interest on the added amount as per the Provident Fund rules. However, it will allow withdrawal of the same amount only by June 1, 2021.
For those receiving pensions and those who don’t have a Provident Fund account, the deducted sum, which is 20% of the monthly salary, will be paid in instalments starting from June 1, 2021.
In order to pay the full amount for the monthly salaries of the government staff, the state of Kerala requires at least Rs 2,500 crore. The government’s decision to merge the deducted salary amount to employees’ PF accounts was made as it could not afford to spend this amount.
The sudden directive to withdraw the decision comes after the CPI(M) State Secretariat informed Finance Minister TM Thomas Isaac to consider the upcoming local body elections. The decision was also taken after pro-UDF trade unions declared that they would seek legal options and also agitate if the government decided to go ahead with the salary cut.
The union government’s promise of giving Rs 9,006 crore as compensation for the Goods and Services tax (GST) to Kerala also fuelled the state government’s decision to withdraw the plan to deduct one month’s salary from its employees.