Hyderabad: The TS government has decided to pay Rs 10,000 of salaries of government staff and pensions for retired employees in cash. The rest of the salary will be paid as usual. Separate counters will be set up for them, the government said.

The government said the SBH, the SBI, Andhra Bank and nationalised banks have already been informed. The TS and AP state governments have made arrangements for salaries to be paid as usual on December 1.

Earlier, both state governments had planned to pay just half the salary as demonetisation left them stranded. AP requires about Rs 2,500 crore to pay salaries and pensions and TS Rs 2,200 crore.

The AP government has told pensioners that their pensions will be credited directly into their bank accounts. The salaries of its regular employees will also be credited into their bank accounts.

The government has said that employees should issue cheques for payments like house rent, and payment for milk and other necessities should be done monthly due to shortage of currency notes.

TS finance officials said that the state's own revenue was down by five per cent in November in the wake of the demonetisation, according to preliminary information. For both states, the actual impact of demonetisation on their revenue will be known in December. AP earns about Rs 3,500 crore and TS about Rs 5,000 crore.

Both state governments have managed without going for an overdraft from the Reserve Bank of India. Under tax devolutions, AP expects Rs 1,760 crore and TS Rs 1,000 crore from the Centre every month.

AP has taken Rs 924 crore as ‘ways and means’ advance, against the limit of Rs1,210 crore, and the ceiling of Rs1,520 crore on ‘special ways and means’ advance.

The AP government expects Rs1,760 crore from the Centre as the state's share in tax devolutions. Officials said that the government could manage without going for an overdraft by taking the ‘special ways and means’ advance to pay salaries and pensions.

The AP government has pending bills of about Rs 8,500 crore, including for salaries and pensions. Bills worth about Rs 4,200 crore are under scrutiny. Of this, Rs 2,200 crore bills have been authorised and about Rs 2,100 crore bills committed.