Telangana govt releases Rs 720 crore to clear pending employee bills

Hyderabad: The Telangana State government has released Rs 720 crore to clear pending bills for government employees. The pending bills have been a long-standing demand from the State employees.

The disbursement, authorised by Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka, marks a major milestone in the government’s commitment to resolving the financial backlog inherited from the previous administration, the government said.

One-time clearance

The government has cleared the entire pending amount of surrender leave encashment spanning from 2022 to February 2025 in a single instalment.

Beyond leave encashment, the funds cover critical dues including Gratuity, General Provident Fund (GPF) withdrawals and various employee advances.

January dues cleared

The Rs 720 crore allocation specifically targets pending bills for the month of January.

The deputy CM emphasised that the ‘People’s Government’ is dedicated to its assurances, utilising a dedicated Green Channel to ensure that employee funds are released systematically every month without the bureaucratic delays seen in the past.

The path to resolution of pending bills

The issue of pending bills has been a point of contention for Telangana’s workforce for several years. Here is the context behind the current backlog and the government’s strategy to fix it:

1. The inheritance of dues

During the tenure of the previous government, a significant backlog of employee-related payments accumulated.

Delays in the release of funds meant that retired employees often waited months for their gratuity, and serving employees faced hurdles in accessing their own GPF savings or encashing surrender leaves.

2. The green channel strategy

To restore financial discipline, the current government established a Green Channel mechanism. This prioritises employee-related payments, ensuring that funds for salaries and pending bills are moved through the treasury with minimal friction.

June 2025 saw the initial release of Rs 183 crore.

From August 2025 onwards, the government committed to releasing a minimum of Rs 700 crore every month to steadily erode the mountain of debt owed to employees.

Systematic arrears management

The recent release is part of a broader fiscal roadmap.

Just last month, the government also issued orders for a 3.64 per cent hike in Dearness Allowance (DA), with arrears from July 2023 to December 2025 being credited to GPF accounts. By clearing surrender leave encashment up to February 2025, the government has now effectively brought the timeline of ‘pending’ arrears much closer to the present day.

Impact on employee welfare

By transitioning from ‘staggered payments’ to ‘fixed-date releases,’ the government aims to prevent employees from being branded as bank defaulters—a common issue when delayed salaries and bills led to missed EMI payments in previous years.