The Hindu Business Line : Scheme for payment of arrears to TN Govt pensioners

Since the implementation of the Sixth Pay Commission recommendation, the Tamil Nadu Government has had a problem in paying out pension dues of Government employees and teachers.

Chennai , Aug. 1

THE Tamil Nadu Government is to have an outgo of Rs 355.44 crore to implement a scheme to settle arrear payment to Government employees and teachers who retired from service between January 1, 1996 and March 31, 1998.

According to a State Government press release, the arrears of gratuity amount in respect of employees who retired between January 1, 1996, and March 31, 1998, together with interest as applicable will be paid to the pensioners in three equal annual instalments in cash with interest, starting from the financial year 2004-05.

The arrears on account of commutation in respect of employees, who retired January 1, 1996 to March 31, 1998, will be paid in three equal annual instalments with interest as applicable, starting from this financial year.

Those who retired between January 1, 1996 and March 31, 2004, 60 per cent of the arrears of pay and allowances with interest, worked out up to March 1, 2003, will now be blocked into a non-interest bearing account from April 1, 2003 and paid in the form of small saving scrips in their names in three annual instalments starting this financial year.

Sixty per cent of arrears of pay and allowances in respect of those who have been in service on April 1, 2004 will be retained in a non-interest bearing deposit account April 1, 2003 and will be paid at the time of retirement in the form of small saving scrips in three equal annual instalments.

For example, for those retiring during the year 2004-2005, the first instalment of the balance arrears together with interest up to March 31, 2003 will be paid in 2004-05 and the second and third instalments will be paid in two subsequent years.

The press release said that since the implementation of the Sixth Pay Commission recommendation, the Tamil Nadu Government has had a problem in paying out pension dues of Government employees and teachers.

The Government's pension payouts have increased from Rs 787.03 crore in 1995-1996 to Rs 3,808 crore in revised estimates of 2003-2004. This has been one of the major causes for the fiscal crisis faced by the Government. It had become necessary to make some modifications in the scheme of pension payments.

The Government undertook modifications in March 2003. As this problem of galloping pension payments is being faced by all States, the Reserve Bank of India constituted a Working Group to make recommendations as to how it could be tackled. This Working Group has given clear recommendation on making certain changes to the pension scheme in the context of the finances of the State Governments.

The changes recommended by the Working Group are similar to the changes made by the Government in March 2003, the release said.

Pending receipt of the report of the Working Group, the Chief Minister has announced that the revised commutation table dated April 30, 2003 to take effect from April 1, 2003 will be cancelled and the calculation of the commutation amount will be made as per the commutation table used earlier with effect from April 1, 2003.

The press release said orders on leave encashment dated March 19, 2003 will be cancelled. This will enable encashment of earned leave accumulated up to 240 days and unearned leave on private affairs of 180 days which shall be converted to 90 days of full, totally 330 days in all. This will apply to all those retiring with effect from April 1 2003.

Encashment of leave salary at the time of retirement shall be based on pay, dearness allowance, house rent allowance and city compensatory allowance.

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