Central Government Withholds Funds, Strangling Kerala’s Welfare Pension Scheme

Thiruvananthapuram: In a move that critics say amounts to financial strangulation, the central government has failed to release its share of welfare pensions for Kerala, despite the state government pre-approving and transferring the funds in advance. For December, Kerala had allocated 24.75 crore rupees to cover the central share for 8,46,456 pension beneficiaries, but the money has yet to reach the accounts of the intended recipients.

The delay directly affects old-age, disability, and widow pensions, where the central contribution ranges from 200 to 500 rupees. The state government’s portion, in contrast, has been disbursed on schedule, ensuring that pensioners do not miss out entirely.

Previously, the state government had managed the entire pension disbursement, including the central share, paying beneficiaries on time and later claiming reimbursement from the centre. Since April 2023, the central government had claimed it could directly transfer the funds to beneficiaries via the PFMS (Public Financial Management System). However, under this arrangement, the central share has never been credited on time. Faced with repeated delays, the Kerala government decided to pre-release the central share itself to avoid depriving pensioners.

Under the PFMS system, the state deposited 24.75 crore rupees into its PFMS unit account, from which the central share is meant to be transferred to each pensioner. Yet, PFMS officials reportedly failed to distribute the funds properly, citing “technical issues” — a pattern seen in previous months.

The central government’s failure to reimburse the state promptly has compounded Kerala’s financial burden. Often, the state receives the funds only after several years. Currently, Kerala is owed 265 crore rupees for various pension schemes. Old-age pensioners are entitled to 200 rupees, rising to 500 rupees for those over 80. In disability pensions, individuals with more than 80% disability receive 300 rupees, while those above 80 receive 500 rupees. Widow pensioners are allocated 300 rupees each. These amounts remain unpaid, placing the state in a difficult position.

Political analysts argue that this delay is more than bureaucratic inefficiency. By withholding funds, the central government is effectively constraining Kerala’s ability to implement its welfare programs, putting pressure on the state and its citizens. Observers view it as an attempt to suppress Kerala’s social welfare initiatives and challenge the state government financially, raising concerns about the politicisation of welfare funding.