Treasury and bank officials in Kerala heaved a sigh of relief on Thursday evening as the first payday for Government employees and pensioners since the demonetisation of high-value currency notes ended without any serious problems though there were some small hiccups caused by insufficient supply of currency notes from the Reserve Bank.
Though the Reserve Bank’s failure to provide Treasuries with cash in required volume triggered protests from pensioners in several places, the process went off rather smoothly on Thursday in most Treasuries thanks to the joint efforts of State Finance Minister TM Thomas Isaac, his department, Treasury and bank officials and the Reserve Bank.
Claiming that there was crisis still on the salary and pension disbursal front, Isaac said, “Despite these problems we were able to manage things to an extent today. I congratulate Treasury officials and others for that. However, it is the responsibility of the RBI to ensure sufficient and steady cash supply in the coming days. Otherwise, the crisis will be more serious.”
Payment of pensions and salaries were almost normal in the major cities and other urban areas but pay distribution was affected in rural areas due to lack of currency notes. Though the Finance Minister had instructed Treasuries and banks where Government payments were being made to give Rs24,000 each to employees, several Treasuries had to limit this to Rs10,000 or less.
At a meeting on Wednesday, Reserve Bank officials had promised to supply currency notes worth Rs1,000 crore to the Treasuries and banks for disbursal of salaries and pensions on Thursday but it was obvious in the morning itself that this was not going to happen. The Kerala Government needs close to Rs3,000 crore every month to pay salaries and pensions.
“It was obvious that we wouldn’t get the amount the RBI had committed. So we first asked for Rs153 crore (the amount required till noon) but we got only Rs75 crore. This is a meager amount. The Centre has the responsibility to provide the Treasuries and banks with required cash in the coming days,” Isaac said. Government pensions are paid in Kerala on the first seven days of every month.
As many as 14 Treasuries in the State did not receive any cash at all on Thursday causing protests from pensioners. Some Sub-Treasuries like the one in Ernakulam had to be closed by 3.00 pm as their vaults went empty even when pensioners were still waiting in long queues. Treasuries in northern Kerala were the worst hit due to insufficient or no cash supply.
Though Isaac had instructed Treasuries to function till 6.00 pm on Thursday, most of them had to be closed much earlier as funds exhausted hours before that. “Still, things were somewhat manageable today perhaps because the rush was not as heavy as we had feared. The situation need not be the same in the coming days,” a Treasury Superintendent in Thrissur said.
Meanwhile, the Income Tax Department will examine the bank accounts in the State into which large deposits have come since the demonetisation of Rs1,000 and Rs500 currency notes. The Central Board of Direct Taxes have reportedly handed over to the I-T Department the list of suspicious bank accounts for this purpose.
The I-T Department will initially put under its scanner suspicious bank accounts into which deposits of over Rs1 crore have come in demonetised currencies. The entities whose accounts have figured in the list included State-run Kerala Beverages Corporation and KSRTC and certain petrol pumps. However, I-T authorities in Kochi explained that detailed inquiries would depend on the result of initial examinations.