In a recent move, it was announced that employees in Kerala have to face a pay-cut. The Kerala government has delayed its decision to further decrease a month's salary of government employees and teachers and will hold talks with employees’ unions. The government employees and teachers, hence, will get a full month's salary in September after five months. The decision of the Left Democratic Front government reportedly follows a directive from the CPI(M) secretariat to Finance Minister Thomas Isaac to hold talks with the unions on repayment of deduction of a month's salary.

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The unions affiliated to the Opposition United Democratic Front had stated that they would seek legal standards and resort to unrest while the pro-Left unions had expressed anxiety. The finance minister was about to assemble another round of talks with the unions even as the Action Council of State Employees and Teachers has sought more concessions from the government if it goes ahead with the salary cut. A cabinet meeting on September 16 went for the decision to further defer the salary of state employees apart from the efforts to reduce expenditure in the wake of COVID-19 pandemic that triggered the financial crisis.

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The delay in getting Rs 7000 crore as GST compensation from the Union government has exacerbated the state's fund crunch. The cabinet decision was that deferment of salary will continue for another six months starting from September 1 and that the salary thus deferred will carry an interest rate of 9% per annum until it is merged into Provident Fund on April 1, 2021.

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