Financial crunch a possibility
Source: The Sangai Express
Imphal, November 06 2011:
The SPF Government is likely to face a financial crisis at the fag end of its second consecutive term as the non-plan amount meant for paying salaries to its employees has been reduced to Rs 300 crores.
A reliable source informed that the financial position of the State was suddenly weakened following implementation of the 6th Central Pay and recruitment to many posts during the second tenure of the SPF Government.
The State Government has been spending Rs 283 crores every month in paying salaries to its 65,000 regular employees and 37,000 contract employees.
For the current year, salaries up to the month of November have been paid.
After payment of salaries for December, the State would face a severe financial crisis unless the Centre sanctions a special financial package for the State.
Whereas the SPF Government, during its second tenure, recruited 16000 new employees to different posts, it costs the Government Rs 2200 crores in paying salaries and arrears to its employees during the current financial year.
The respective figures spent by the Government in paying salaries and arrears to its employees during 2008-09, 2009-10 and 2010-11 were Rs 1100 crores , 1600 cores and 2000 crores.
The State witnessed a financial crunch when the 5th Pay Commission was implemented.
Meanwhile, Director, Institutional Finance in accordance with an instruction from the Ministry of Finance issued an order on November 3 stating that the State Government should release money only via electronic transfer henceforth, in place of the earlier cheque/cash payment system.
This new measure was introduced by the Ministry of Finance after reviewing the State's banking infrastructure.
It further directed the State Government to install a currency at every district headquarters and also to open a bank branch in each and every block.
According to the Ministry of Finance's instruction, these bank branches which should be opened in every block should be operational by December 31 .