The Telangana government ordered for deferment of payment of wages/salaries, including all allowances and perks / pensions etc. of all government staff both in service and retired. The wage deferment ranges from 10 percent to 60 percent as per their cadre.
Explaining the reasons for such a drastic measure, the G.O.Ms.No. 27, Dated: 30-03-2020 stated as follows: Government keeping in view the economic impact caused due to lockdown and consequent lack of inflow of resources and in view of additional expenditures being incurred to control COVID-19 ordered for such a deferment.
However, the state government's decision was received with awe and anger by lakhs of state government employees and teachers. The initial reports in the media were ambiguous on whether the wages were actually cut or deferred for now only to be credited at a later date.
However, the official order talks about the deferring of wages but not wage cut.
But, the leaders of employees and teachers are especially furious over the manner in which the government unilaterally enforced the decision of wage freeze without consulting the representatives of the employee community.
Chava Ravi, the general secretary of Telangana state United Teachers Federation (TSUTF) said that the employees perhaps would have reconciled if the decision to freeze had come into effect from April salary. Instead, the official order says that the wage deferment will come into force from March salary to be paid on April 1 only. Further, the order does not mention how long will this continue and when will the deferred salaries be paid. Such ambiguity in the government order has obviously caused more heartburn among lakhs of employees.
The GO refers to two reasons for initiating such a drastic measure even as the Central or other state governments have not done so: One, their drastic fall in revenues and two, the additional expenditure due to COVID-19.
But, the lock down has been clamped three weeks later in this month and how much of additional expenditure has been incurred on fight against the epidemic so far is not clear.
The employees are already aggrieved over the fact that the pay revision is pending for long time and the Chief Minister has taken a position that the same will be delayed due to fall in government revenues due to economic slowdown even before the Pandemic was declared. The fear among government staff is that the wage freeze is a precursor for further delaying or even denying the pay revision altogether.
On the other hand, the Chief Minister has repeatedly claimed that the Telangana is a rich state and he told the State Assembly that the fiscal position of the state is strong enough to deal with any eventuality. The Chief Minister has even said that the state government would seek an overdraft from the Reserve Bank of India (RBI) and the good offices of even the Prime minister would also be sought in this regard to tide over any possible fiscal strain in facing the epidemic. Now, suddenly, the government comes with the idea of wage freeze quite contrary to the claims of the Chief Minister till now.
The employees drew a similar parallel in the recent past. The government took an adamant position that its fiscal situation does not in any way permit to support the state-run TSRTC. In an affidavit to the High Court, the government claimed that its finances would not even permit to give a fiscal assistance of even Rs. 50 crore to make the RTC run. After a prolonged strike, the government reversed its position. The RTC was given Rs. 1000 crore in the latest budget, a demand summarily rejected by the Chief Minister earlier. Besides, the RTC staff was paid salaries for the striking period and several more incentives were also declared. Thus, the employees are quite skeptical of the fiscal reason stated by the government for imposing a wage freeze.
In a letter to all state Chief Secretaries, the Union Labor secretary stated that all the employers of public, private establishments may be advised not to terminate their employees, particularly casual or contractual workers from jobs or reduce their wages. If any worker takes leave, he should be deemed to be on duty without any consequential deductions in wages for this period. Further, if the place of employment is to be made nonoperational due to COVID -19, the employees of such unit will be deemed to be on duty.
Giving a rationale for rendering such an advice to all the state governments, the letter from the central government stated that termination of an employee from a job or reduction in wages in this scenario would further deepen the crisis and will not only weaken the financial condition of the employee but also hamper the morale to combat their fight with this epidemic.
But unfortunately, this was only an advice. The central government has not offered to assist the state governments in ensuring the said advisory. Despite such clear suggestion from the union government, the state government has itself deferred part of salaries of employees of government, public undertakings, and all those institutions receiving grants from state governments.
The employees wonder how the state government’s financial position turned so precarious within ten days into the lockdown. Such actions of the state government would only motivate private employers from imposing similar or even greater wage deferments. The government loses its legitimacy to issue any instructions to the private employers.
Yet another criticism is that the state government resorted to this drastic measure of deferring salaries of staff even before exhausting all the other fiscal option such as over draft, restructuring the public expenditure priorities, issuing bonds, pruning wasteful expenditure, and even seeking donations from the rich and wealthy in the country and abroad.
Quite surprisingly, the GO does not exempt pensioners drawing lower pension, outsourcing employees who get meager payments, and the employees of departments such as health, sanitation, police etc., who are working more risking their health and even those of their family members.
The Andhra Pradesh government which faces a much more fragile fiscal situation because of losing a vibrant economy like Hyderabad has also not resorted to such tough measure.
The leaders of employee organizations further allege that this move of the state government would only help in drawing a wedge between the employees and the people at large. Given the general perception that the government staff are relatively well paid when compared to their private counter parts in the private sector, besides having a luxury of stable income and permanent job, the employees are not venturing out to agitate the move publicly especially in such a situation of health emergency. But, discontent is certainly simmering over the state government's controversial decision.