The government of Tamil Nadu on Thursday passed an order increasing the age of retirement for government employees from 58 to 59. This is the first time the state government has revised the retirement age of government employees in the last 40 years.
According to a press release issued by the Chief Minister’s office, the order to increase the retirement age is applicable to all government and government-aided school teachers, college teachers and public sector employees who are due for retirement from May 31, 2020 onwards.
However, the move has drawn mixed reactions.
Speaking to TNM about the larger implications of this move, PK Ilamaran, the State President of Tamil Nadu Teachers’ Association, says that while retaining a section of employees for one more year, the government is depriving a crop of youth from their rightful jobs.
“For example, around 70,000 graduates who had passed the Teacher Eligibility Test (TET) in 2019 and were waiting for jobs as government teachers will have to wait for one more year. This will especially burden aspirants whose families are dependent on their income,” he explains.
However, it will not bode well for another section of employees who were on the brink of promotion – either before retiring or when their superior retired. “The government must reconsider this decision because it has more shortcomings than benefits,” he says.
“This decision will definitely shrink the job market in the state. At this point in time, when there is rampant unemployment, I don’t think this is a wise move to do,” says MG Devasahayam, a retired bureaucrat. He adds that the priority of the government in the current economic climate must be to provide people with jobs wherever possible.
In 1998, the Union government had increased the age of retirement for central government employees from 58 to 60. Devasahayam says that there have been demands from state government employees to make the retirement age uniform for all the states. However, he also points out that the negatives of increasing the age of retirement now outweigh the advantages.
Both Devasahayam and Ilamaran say that the Tamil Nadu government’s decision may satisfy a section of existing employees who might be in for better pension amounts due to an added year, but those seeking jobs have higher stakes and should be prioritized.
Though the state government’s press release announcing the increase in retirement age did not specify any reason, there is widespread speculation that cash crunch might be a major factor.
The decision comes days after the state government decided to freeze the Dearness Allowance for government employees at 17% till July 2021, in line with the decision taken by the central government. This freeze is expected to save at least Rs 4500 crore for the state government, which is cash strapped to fight the uphill battle against COVID-19.
The first charge on the funds of the government is to pay salaries, pensions and interest on its debt, says J Jeyaranjan, economist and Director of the Institute of Development Alternatives, Chennai. “If the government defaults on these, their credit rating goes for a toss. This seems like an attempt to avoid going down that path,” he explains. He adds that while this can save the government’s financial situation for now, it is just a deferment in payment which is anyway going to flow out the subsequent year.
“There was no explanation behind this announcement in any of the documents the government released. When the last retirement age revision was carried out, it was long overdue since the life expectancy of people had substantially improved. The government found itself paying out pension to a person for 30 years while he/she might have served in the government for just 25 years, which was a huge burden on the exchequer. This time, we have not been given any reason for the move,” he adds.