Daijiworld Media Network - Bengaluru (SP)

Bengaluru, May 14: The state government is staring at financial crisis on account of drying of its income sources because of lockdown. Finance department sources feel that if this situation prevails, the state government will be forced to prune down the salaries of its employees from June onward to balance its income and expenditure.

The finance department officials had made a pitch for affecting a cut in the salary of government employees during the month April itself, but under pressure from the chief minister, they had to change their stand and pay full salary to the employees. The government will have to do lot of juggling to pay their salaries in full for May by pooling resources but thereafter there is no likelihood of paying full pay to government workers, sources added.

As the situation is very bad, the government will be left with no other option but to affect salary cuts. There were suggestions to raise loans to pay salaries and to fund certain important projects but the government decided against borrowing as it is aware that repaying the loans would be a difficult proposition.

The government gets most of its earnings from commercial taxes, registration and stamp duty, motor vehicle taxes, excise etc. Unless these sectors begin to function at optimum level, the government coffers will not start ringing, said an official in the finance department on condition of anonymity.