Hyderabad: Pay revision for government employees is becoming a major challenge for the Andhra Pradesh as well as the Telangana government. About 60 per cent of the states’ revenues are already going towards payment of salaries and pensions of nearly 12 lakh employees and pensioners. A further hike at this stage is likely to push both the states into bankruptcy.

The 10th Pay Revision Commission, headed by P.K. Agarwal, has recommended a 29 per cent salary hike, which would impose a burden of over Rs 3,500 crore on each state. Meanwhile, employees’ unions are demanding up to 69 per cent hike.

Both governments are sitting on these recommendations, putting the sanctity of the Commission in question. The total salary bill of Telangana is Rs 18,400 crore per annum at present and for Andhra Pradesh it is Rs 22,000. The tax revenues of Telangana have been put at Rs 35,300 crore.

Both governments have began consultations with employees’ unions to convince them to accept a hike lower than the 29 per cent prescribed by the committee keeping in view the grave financial problems being faced by the states after bifurcation.

The committee has recommended a minimum salary of Rs 13,000 per month and a maximum salary of Rs 1.10 lakh against the employees’ demand of Rs 15,000 and Rs 1.37 lakh respectively. At present, it is in the range of Rs 6,700 and Rs 44,740.

The Committee had stated the revised pay scales would come into force from July, 2013. If approved, the governments will owe arrears of 19 months salary, which alone works out to nearly Rs 30,000 crore for each state. Both governments are thus trying to extend the cut-off date to June 2014, when the states were formed.