A word of warning on Kerala State's Finances


An Open Letter to the Finance Minister of Kerala State

Kerala's Finance Minister should stop pandering to government employee unions

On August 15th, 2020 the Kerala State Government, delivered a slap on the face of every Malayali who did not have a government job, by declaring a festival bonus for all levels of government workers. This, despite the fact that the State Economy is in the doldrums and that government workers have been collecting full salaries despite many not even being required to work. 


Trade unions should all be looking at the economic big picture instead of trying to push a selfish, financially unsound agenda that is not in the State's economic interests.

I therefore protest the state's financial management in the strongest terms. I particularly question the decision to pay festival bonuses to government workers (with the exception of Health/ Community Workers and Police) . 

Supports for minimum wagers and unorganized workers: Shri Gopal Rai (Labour Minister of Delhi State) and Arvind Kejriwal, the Chief Minister of Delhi recognize that the poorest members of society must be protected. They therefore raised minimum wages in Delhi to what is arguably the nation's highest minimum wage of Rs 14, 052 per month. Also Gopal Rai (SVS's Founder) supports SVS's efforts to support unorganized workers which represent as much as 93 percent of the nation's workers.

It must be noted that per the Kerala State Finance Act of 2020, the GSDP of Kerala for 2020-21 was projected to be Rs 9.78 lakh crores (which at current prices was 12 percent higher than the revised estimate for 2019-2020). Any schoolboy can compute that these projections are now tragic fiction as we are unlikely to even match 2019-20 levels.

Further, citing the analysis of Kerala's Financial indicators prepared by R. Mohan for the 15th Finance Commission:

The borrowings and liabilities to GSDP ratio was proposed to be be brought down to 28 percent by 2024-25 (the most recent figure provided by Mohan (for 2018-19) was a jaw dropping 30.5 percent. And these figures do not include the liabilities from the 2018 floods!

In 2018-2019, the cost of salaries, pensions and interest in the budget was 57.14 percent of Kerala's GSDP. We are still borrowing money to cover current expenses ( 53.68 percent of borrowings!). With the pandemic downturn and the loss of gulf remittances, this ratio will start climbing once again. 

The logic for paying bonuses to employees who are not engaged in hazardous work does not really exist, given the hardships the unorganized sector is facing. 

Every sensible citizen of Kerala will I trust join me in urging the Government to rescind bonus payments at least to those who are not actively involved in matters relating to public safety or health.


Pravin J P Arapurakal, National President, Shramik Vikas Sangathan (SVS)

(SVS is the labour welfare organization of the Aam Aadmi Party)

1 comment:

  1. We need to be responsible citizen and respond to this move of Kerala government that is illogical and economically destructive


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