Thiruvananthapuram: A week ago, Keralites were exchanging greetings on Onam, the annual festival that recalls the prosperous times of the state under the mythical king Mahabali. After the festivities, however, Kerala is staring at a financial crunch that has led to delayed payments to various sectors — including public works contractors and pensioners.
Chief Minister Oommen Chandy and Finance Minister K.M. Mani have denied there is a financial emergency, but the delayed payments are affecting thousands of people from contractors to those on state welfare.
A stark reflection of the cash crunch is the poor road conditions across the state, owing to contractors’ refusal to take up fresh contracts until they are paid for jobs already completed. One estimate of the dues to contractors for jobs done from November 2013 puts the figure at Rs26 billion (Dh1.56 billion).
Some of the contractors started boycotting government tenders from June, and from August they have stopped work at sites, bringing works such as road repairs to a standstill.
Contractors had gone on strike before Onam, with demands including withdrawal of a recently-introduced purchase tax and immediate payment of dues at least for works completed in 2013. The government gave an assurance on withdrawing the purchase tax, but contractors have refused to take up fresh work without their dues being cleared.
Road works are also held up because the state government has to clear dues of Rs960 million to the Bharat Petroleum Corporation for tar purchases. The company has informed the state government that fresh tar cannot be released before the outstanding dues are settled.
The dilapidated roads in many parts of the state have prompted local bodies to try and influence contractors into doing at least minor repair works. But the unavailability of tar has come in the way of their plans.
Residents have put plantain saplings and other signs to warn motorists of the bigger potholes on the roads.
Kerala’s financial management has got progressively tougher over recent years owing to new welfare measures announced, and a large number of government staff. The state has a monthly salary bill of Rs14 billion and a pension and interest burden of roughly Rs7 billion respectively.
