Telangana’s Mounting Financial Burden: Salaries and Pensions Skyrocket Over a Decade

The Telangana government is facing an escalating financial burden as its annual spending on employee salaries, wages, and pensions continues to climb. This comes at a critical time, as the government has yet to announce its decision on the recommendations of the second Pay Revision Commission (PRC), led by senior bureaucrat N. Shiva Shankar.

Data from the Comptroller and Auditor General of India (CAG) reveals a significant increase. In 2022-23, the state’s salary bill for its workforce reached an astounding ₹25,769 crore, with an additional ₹15,816 crore allocated for pensions. This represents a dramatic surge since Telangana’s formation. In 2014-15, the inaugural year, regular employee salaries stood at ₹10,639 crore. By 2015-16, this figure nearly doubled to ₹18,065 crore, largely due to a substantial fitment benefit introduced by the then-BRS government. Pension payments followed a similar trajectory, rising from ₹4,210 crore to ₹8,217 crore within the same timeframe.

Another notable jump occurred between 2021-22 and 2022-23. Salary outlays climbed from ₹22,150 crore to ₹25,679 crore, while pension expenses rose from ₹14,025 crore to ₹15,816 crore. This increase coincided with the government’s implementation of recommendations from the PRC led by retired bureaucrat C.R. Biswal.

Telangana’s expenditure on salaries and pensions

Beyond regular employees and pensioners, Telangana’s expenditure also includes payments for various other categories such as work-charged staff, grant-in-aid employees, home guards, daily wage workers, and contract and outsourcing personnel. A significant development in this area was the decision by the previous government to discontinue the services of 40,561 village revenue assistants and officers (as of March 2021), citing widespread corruption. Some were terminated, while others were reassigned to different departments.

However, the Congress government, which took office in December 2023, has recently reinstated the village revenue administration through a new system of gram panchayat officers, a move that is expected to further increase the state’s expenditure.

Past estimates from the Planning department indicate that the government employs over 9.16 lakh individuals across various categories. Of these, approximately 5.7 lakh are regular employees and pensioners, with the remaining 3.6 lakh falling into other employment classifications.

With a recent surge in recruitment for various government positions over the last year, a substantial increase in salary payments is anticipated. However, senior officials argue that this impact might be minimal, as the newly filled positions primarily address existing vacancies for which payments were already accounted for in budget estimates.

Officials note that the recommendations of the PRC led by Mr. Shiva Shankar were due for implementation from July 1, 2023, and the final decision now rests with the current government.

Apart from regular employees (on payrolls) and retired employees, Telangana incurs expenditure on salaries paid to other categories of employees

Diverse Employee Categories Under Telangana Government (as of March 22, 2021, per Planning Department)