State economy on the brink of collapse
Uncertainty looms over pay clearance
Source: Hueiyen News Service

Imphal, April 09 2012: In a reminiscence of W Nipamacha's stint as Chief Minister of Manipur, the state economy is on the brink of crumbling within days of the new Congress government coming to power even as uncertainty looms large over the prospect of releasing pending salaries of the government employees for the month of March.

According to a reliable source in the state Finance Department, if the state government is committed to giving away the salaries of March, it has to release the amount before April 19 because after this, the government would not be able to pay the salaries even if it wants.

The source disclosed that the state government has not been able to maintain Rs 60 core meant for Wages and Means in its account due to recent withdrawal just before completion of March financial year.

Taking serious note of the matter, Reserve Bank of India (RBI) has notified to the state government over its overdraft condition.

Even though the exact amount of overdraft is not known right now, it may be known by May.

However, state Finance Department speculates that the overdraft may be around Rs 400 crores.

If the state government failed to recover the overdraft amount within 15 days of issuing the notification, RBI would seized all the existing accounts of the state government, and it would take at least 15 days to reopen the state accounts, the source explained, adding that since RBI is likely to seize all state accounts on April 19, the state government would have to pay the salaries of March before April 19, if it wants.

The source further disclosed that the present condition of state economy is the result of huge deficit in Public Account, Normal Revenue Account and Capital Account, which are parts of Consolidated Fund of the state.

In the past years, the government had appointed many employees in the Home, Education and Medical Department but the amount for payment of salaries to these employees have not yet been released by the Centre.

So, the state government has been paying their salaries from its account, thus resulting in the present state of bankruptcy.

Towards the end of March financial year, many Cheque Dual Authorities (CCA) have also released sanctioned orders for various contract works.

Besides, hike in the salaries of the employees in tandem with implementation of 6th Central Pay Recommendation has made the overdraft more serious.

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