Amid a severe economic crisis, Kerala’s state finance department faces the challenge of securing Rs 9,000 crore for the collective retirement benefits of employees this month. Rumors of an increased pension age have circulated, but the government has not confirmed this. The state has expressed concerns to the Centre regarding the delay in determining the loan limit for the first quarter of the financial year.
Kerala has been in an overdraft since early this month, dealing with a financial crunch. Despite a budget announcement to start monthly pension payments from the current financial year, this action has not commenced. Approximately 16,000 employees are expected to retire from government service this month, requiring around Rs 9,000 crore for benefits. The Finance Department hopes for delays in completing pension benefit procedures. Including welfare pension payments could extend arrears up to six months. Although there are rumors about raising the pension age, the Finance Department stated that no official discussions have taken place.
Local elections are scheduled for next December, with some political opinion favoring a one-year increase in the pension age. However, this policy decision rests with the LDF, which needs to deliberate on the matter. The state’s debt ceiling for the current financial year is Rs 37,512 crore. Typically, the Union Finance Ministry sets the limits for the first quarter by early May, but no notification has been received yet. The state government requested an advance of Rs 5,000 crore until the loan limit was fixed, but the Centre provided only Rs 3,000 crore.
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