Telangana State To Spend Rs 70,000 Crore for Salaries, Pensions
The Cabinet decision on the two DAs was taken on Thursday. The previous BRS government had revised salaries and pensions twice, in 2015 and 2021.
Hyderabad: The salary and pension bill of the Telangana government is set to touch nearly Rs 70,000 crore this year following the Cabinet’s decision to clear two of the six pending dearness allowances (DAs) for government employees and pensioners. The two DAs, pending since January 2024, will impose an additional annual burden of around Rs 2,500 crore on the state exchequer.
The government pays salary to 3,96,995 employees and pension to 2,94,945 pensioners. The burden on the state exchequer has increased sharply since the formation of Telangana state in 2014. The salary and pension bill, which stood at Rs 16,378 crore in 2014-15, jumped to Rs 28,748 crore in 2015-16 after the then BRS government announced the new Pay Revision Commission (PRC) and salary revision. At present, the salary and pension expenditure is estimated at Rs 65,282 crore. This accounts for about 55 per cent of the state’s revenue earnings, 43.3 per cent of its total revenue expenditure and 4.5 per cent of its GSDP. The high committed expenditure leaves limited fiscal space for welfare schemes and development programmes and adds to the government’s dependence on borrowings to meet other expenditure. Telangana is among the top five states in the country in terms of expenditure on salaries and pensions as a share of revenue expenditure.
The state government had provided Rs 50,000 crore for salaries and Rs 15,000 crore for pensions in the 2026-27 Budget, taking the projected combined expenditure to Rs 65,000 crore. With the release of two pending DAs and the government’s assurance to clear one more DA in January, the annual salary and pension bill is expected to rise to nearly Rs 70,000 crore. The Cabinet decision on the two DAs was taken on Thursday. The previous BRS government had revised salaries and pensions twice, in 2015 and 2021. It announced 43 per cent fitment, or increase in basic pay, in 2015, imposing an additional burden of about Rs 6,500 crore annually on the state exchequer. In 2021, it announced 30 per cent fitment, adding another burden of around Rs 8,000 crore a year. The BRS government also constituted a new PRC in 2023, but the commission is yet to submit its report. Employee unions are demanding that the Congress government obtain the PRC report immediately and announce at least 50 per cent fitment. If the government accepts a new fitment in the range of 35 to 40 per cent, it is estimated to impose an additional burden of nearly Rs 10,000 crore annually on the state exchequer. The latest DA decision is part of the government’s phased response to the demands of employees and pensioners, who have been seeking clearance of all six pending DAs along with other service-related demands.