Kerala extends earned leave encashment freeze by six months

The government has extended the suspension of employee surrender and encashment of earned leave for another six months, citing the financial burden imposed by the COVID-19 pandemic. Last-grade servants, such as office attendants in subordinate services, part-time contingent employees, and municipal contingent employees, will be exempt from this freeze.

It is not only the financial burden due to COVID, the state exchequer is in a pathetic condition. The Comptroller and Auditor General (CAG) report have stated that Kerala is in a serious financial crisis. The state continues to borrow and supports a lot of populistic schemes. The revenue decline accelerated after the rollout of GST as the state's overall tax collection dropped by a third since then as per the state minister. Around 90% of the state's revenue earned goes for salaries and pensions alone.

The periodical surrender of earned leave by government employees and teachers, including those on temporary appointments, has been postponed for another six months, according to a Finance Department decree dated July 26.

The government issued instructions freezing the surrender of earned leave until May 31, 2021, in November of last year. This has now been extended for an additional six months.

According to the decree, the decision was made "in light of the significant economic damage caused by the second wave of COVID-19 and the need to conserve resources to battle the epidemic."

It will affect any bills pending with the Treasury as of the order's date. Sanction orders for encashment that have already been issued have been cancelled, and the earned leave will be refunded back to the employees' leave accounts.

Employees of universities, grant-in-aid institutions, autonomous bodies, statutory undertakings, welfare boards, apex societies, and public sector undertakings will be affected by the decree.