Drastic cut in non-Plan expenditure likely

An eerie silence engulfs Kerala’a capital city in the evenings as people choose to confine themselves to their houses to ward off the COVID-19 threat. A scene from the Thampanoor bus stand. A drastic reduction in non-Plan expenditure, mainly rationalisation of salary bills of the government, is being seriously explored by the State to mitigate the impact of the fiscal shock rendered by COVID-19. (Source: THE HINDU)

A drastic reduction in non-Plan expenditure, mainly rationalisation of salary bills of the government, is being seriously explored to mitigate the impact of the fiscal shock rendered by COVID-19.

The State Planning Board is understood to have discussed a cut in the salary of government employees and has concluded that none should be spared of the onus of sharing the impact of the virus outbreak that has battered the economy.

Political weapon

Though the Cabinet has approved a Salary Challenge for government employees, it may not elicit a positive response from all sections, mainly the Opposition United Democratic Front which has used it as a political weapon to target the government. Service organisations affiliated to the UDF too may toe a similar line.

In this context, it has been proposed to study the models put forward by the Telangana and Maharashtra governments.

Though the 11th pay revision commission headed by K. Mohandas has come into being and initiated the preliminary procedures, the commission may take a more realistic approach in the wake of the present crisis and may not make liberal recommendations, sources said.

Debt-servicing, payment of salary and pensions and administrative expenses are some of the main components of non-Plan expenditure.

Repayment of debts cannot be deferred. Hence, the government would have to drastically cut down on the administrative cost as part of the revenue mopping exercise.

This includes a cut in fuel bills, creation of posts, deputation of staff and even conduct of conferences, celebrations and such others. Putting a cap on all activities at one go may not be feasible, but the government would have to take a call on ending all wasteful expenditure to overcome the crisis.

Moreover, the virus outbreak has made it imperative for augmenting the infrastructure facilities in the health-care sector and that would again raise the demand for more resources, sources said.

Not a tough task

Before opting for a salary cut, the government would take the stakeholders into confidence.

But given the gravity of the crisis, convincing them of the need for sharing the burden may not be a tough task, sources said.