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Kerala Government issues ordinance for deducting salaries of its employees to combat COVID-19 crisis

The Kerala state government has decided to deduct six days’ salary of its government employees every month for the next five months.

Apr 29, 2020 16:56 IST
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The Kerala Government on April 29, 2020 decided to issue an ordinance allowing it to cut salaries of its employees to mobilise funds for the state to tackle the COVID-19 crisis. 

The move comes a day after the Kerala high court stayed an order of the state government directing salary cut of its employees, ruling that it lacked legal backing. 

The current ordinance has been approved by the state cabinet. Announcing the decision, Kerala Finance Minister TM Thomas Isaac said that under the ordinance, the state government is empowered to defer 25 percent of the salary of its employees in the event of a disaster.

Objective

The main aim behind the decision is to raise funds to fight coronavirus pandemic. The state is undergoing a fiscal crisis as the tax collection revenue had fallen drastically.

Key Highlights

Under the ordinance, the Kerala state government has decided to deduct six days’ salary of its government employees every month for the next five months.

This order will apply to all the state employees including employees of all State-ownedd enterprises, Public Sector Undertakings, Quasi-Governmentt organisations and universities. 

The State Ministers, MLAs and various board members and members of local body institutions and various commissions will receive 30 percent less salary for one year.

The order, however, will not apply to those who have already contributed their one-month salary to the Chief Minister's Disaster Relief Fund (CMDRF).

There will also be no salary cut for those staff who earn less than Rs 20,000 per month. 

The ordinance also provides that the State government can decide on giving back the deferred amount within six months. 

The state government took the ordinance route after the Kerala High Court order. According to Finance Minister TM Thomas Isaac, the state government could have appealed against the state High Court order, but the court said that the government’s order on deducting salaries of its employees had no legal backing. So the government has now decided to make it legal, claimed Isaac.

The Kerala Chief Minister, Pinarayi Vijayan had stated earlier that the deducted amount will be returned to the employees when the financial condition of the state improves. There is no confirmation on the same for now though. 

Background

Kerala is not the only state to deduct the salaries of its employees in the wake of coronavirus pandemic. Other states including Telangana, Maharashtra, Andhra Pradesh, Odisha and Rajasthan have also announced salary cuts in varying degrees from 10 percent to 100 percent, depending upon the ranks of the employees. 

The Union Cabinet had also decided on April 6, 2020 to reduce salaries, allowances and pensions of the Members of the Parliament by 30 percent for one year. Prime Minister Narendra Modi, President Ram Nath Kovind, Vice President Venkaiah Naidu and all the state governors also voluntarily decided to donate 30 percent of their salaries every month for one year. The deducted amount will be used in India’s battle against coronavirus. 

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