Thiruvananthapuram: The recommendation in the White Paper to raise the retirement age of government employees to 58 will not be accepted in this year's budget. The government assesses that it cannot shoulder the financial burden of a salary hike due to the ongoing economic crisis. Instead, priority will be given to regularising the Dearness Allowance (DA) without further arrears.

Crucial announcements are expected when Chief Minister V D Satheesan presents the revised budget on June 19. A 2% Dearness Allowance is currently in arrears, which will be officially announced in the budget. The arrears based on the retrospective effect of previously sanctioned DA instalments have not yet been paid. In this category, ₹21,670 crore is owed in cash to employees and ₹14,387 crore to pensioners. The government is considering disbursing this in a phased manner.

The budget will also include a roadmap to retain KSEB (Kerala State Electricity Board) within the public sector while opening up the power generation sector to more private investments.

If the government takes on the liabilities deferred by the previous administration, it will be unable to implement the promised Indira Guarantees. According to the White Paper, raising the retirement age could save ₹6,000 crore annually on retirement benefits, amounting to ₹12,000 crore over two years. However, the government notes that this is not a permanent saving; benefits must be paid whenever employees retire, meaning the expenditure is merely being deferred.

There are also indications that the government will accept the White Paper's proposal to limit salary revisions to once every 10 years.