CAG pulls up KSEB for revising pay, pension without State government nod
Pay revision in 2021 resulted in an “irregular expenditure” of ₹1,011 crore towards pay arrears and ₹306.66 crore towards pension arrears as the revision was with retrospective effect from July 2018, the compliance report of the CAG for the year ended on March 31, 2022, tabled in the Assembly said
The Kerala State Electricity Board (KSEB) has landed in trouble with the Comptroller and Auditor General (CAG) for revising pay, allowances and pension without the approval of the State government.
A KSEB pay revision in 2021 resulted in an “irregular expenditure” of ₹1,011 crore towards arrears in pay and allowances and ₹306.66 crore towards pension arrears as the revision was implemented with retrospective effect from July 2018, the compliance report of the CAG for the year ended on March 31, 2022, tabled in the State Assembly on Thursday said.
In revising the pay without prior approval from the government, the State government power company violated its own articles of association and orders of the State government, the CAG report noted. “The increased annual financial burden on account of pay revision 2021 was estimated at ₹543 crore a year. As a result, the expenditure on emoluments increased from 23.77% to 46.59% of its revenue during the period 2017-18 to 2020-21,” the CAG noted, adding that the increase in expenditure on account of the revision would further weaken the “already fragile financial position” of the KSEB.
The CAG has advised the State government to ensure that the KSEB revises its pay and pension only after securing its permission. The Power department has been directed to take stringent action against the power utility’s board members for ignoring the government’s directions.
‘Irregular revisions’ earlier too
Articles 55 and 56 of the Articles of Association of the KSEB, which transformed into a government-owned company from a board in 2013, requires prior consent from the government in matters related to service conditions of its employees. While the pay revision on February 26, 2021, was implemented without government approval, the KSEB had resorted to similar “irregular revisions” in 1995, 2001, 2007, 2011 and 2016 as well, the CAG noted.
After the CAG commented on the irregular pay revision of 1995, the Kerala government had assured the Committee on Public Undertakings (CoPU) in 2009 that, henceforth, decisions regarding the pay revision would be taken only after obtaining government approval. “Despite these assurances, the company revised the pay in 2011, 2016 and 2021 without the prior approval of the Government of Kerala,” the report said.
The CAG did not accept the KSEB management’s argument that the pay revision was based on a long-term settlement with the recognised trade unions, and that it constituted a legally-binding agreement. “The reply is not factual as the company was authorised to enter into long-term settlement only with approval of government,” the report said.
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