Kerala Government Issues Order Restricting Salary Hike in KSEB

In a significant move, the Kerala State Electricity Board (KSEB) has faced restrictions on granting salary hikes and additional benefits to its employees without prior approval from the government. The order mandates seeking approval from both the government and the finance department before implementing any new benefits, diminishing the prospects of receiving perks and arrears for the employees. This directive comes in the wake of KSEB’s substantial losses, amounting to INR 1023.62 crores in the fiscal year 2022-23, of which the government assumed 75%, bearing a liability of INR 767.71 crores. The government’s decision to curb such benefits aligns with efforts to improve the power sector, potentially allowing the state to secure an additional 0.5% of the gross domestic product (GSDP) in loans, totaling around INR 5500 crores, as part of broader fiscal responsibility measures.

KSEB has grappled with persistent losses over the past decade, with no prior restrictions on providing benefits to employees. Despite the board implementing significant salary hikes on two occasions in recent years, the government has not granted approval, reflecting the challenges faced by the power sector in Kerala. The stringent measures are aimed at addressing financial issues and fostering reforms within the public sector, emphasizing fiscal discipline and responsible financial management in the state.