Telangana Faces Rs 10,000 Cr Employee Dues as 28,000 Set to Retire

The Telangana state government in Hyderabad is grappling with a mounting financial strain, with nearly Rs 10,000 crore in dues pending towards government employees and retirement benefits. The fiscal pressure is set to intensify as more than 28,000 state employees are scheduled to retire over the next three years.

Employees and pensioners across the state have taken to the streets to demand the clearance of their accumulated dues. The pending payments encompass retirement benefits, gratuity, pensions, and leave encashment, which are estimated to impose an annual burden of nearly Rs 9,000 crore on the state exchequer.

According to official estimates, around 9,700 employees will reach superannuation by the end of 2026. Another 9,400 employees are slated to retire in 2027, followed by approximately 8,700 employees in 2028.

Chief Minister A Revanth Reddy has acknowledged that the government is finding it difficult to disburse salaries on the first day of every month. Speaking after signing agreements with banks in June to extend accidental insurance coverage to employees, the Chief Minister noted that monthly retirement benefits of nearly Rs 1,000 crore were compounding the state's financial difficulties. Although the government releases Rs 750 crore each month towards these benefits, a monthly deficit of around Rs 250 crore remains.

While the state government maintains that allocations are made in the annual budget to ensure timely payments, employees state that arrears continue to accumulate each year. Nearly 50 per cent of the total funds allocated in the current annual budget for retirement benefits was spent within the first four months of the financial year.

The state also faces upcoming obligations regarding the Pay Revision Commission (PRC). The term of the second PRC is set to expire on September 30, and the potential implementation of new recommendations is expected to significantly increase expenditure on both active salaries and pensions.

In response to the fiscal challenges, Chief Minister Revanth Reddy stated that he has been working 18 hours a day and appealed to government staff to work an extra hour daily, assuring them that their demands would be addressed as state revenues improve.