Since 2001-02, when the Union government took the first step towards reforming the pension system, the state's pension expenditure grew by 62% to reach Rs 3,642 crore in 2005-06. The Comptroller & Auditor General of India, in its report for 2005-06, has pointed out that, with the number of retirees increasing, the pension liabilities are likely to increase further.The State Government has not constituted any fund to meet the fast rising pension liabilities of the retired State employees, the CAG has pointed out.
During 2005-06, the government shelled out Rs 10,161 crore to pay its staff.
Salaries alone accounted for 43% of the revenue receipts of the State, the report notes. The only consolation for the government, it seems, is that expenditure on salaries as a percentage of gross state domestic product (GSDP) declined marginally from 6% in 2001-02 to 5% in 2005-06.
Salaries as a percentage of revenue receipts declined from 59% in 2001-02 to 43% in 2005-06. The CAG has also criticised the government for not taking any steps towards reforms in the existing pension scheme, as recommended by the 12th Finance Commission.
The 12th Finance Commission had recommended that the state follow a recruitment and wage policy that would keep the total salary bill with 35% of the revenue expenditure net of interest payments and pensions.
During 2005-06, the salary, however, constituted 58%, the CAG has noted.