Battling financial blues, Himachal may allow govt staff to retire at 59

The Cabinet sub-committee on Resource Mobilisation has recommended raising the retirement age of government employees in Himachal from 58 to 59 as a one-time measure to defer retirement benefits for a year considering the grim financial health of the state but only after assessing the impact of this move on the unemployed youth.

The sub-committee, headed by Deputy Chief Minister Mukesh Agnihotri, submitted its report to the Cabinet last week. Apart from increasing the retirement age by one year, it has also been suggested that by fixing the retirement age of employees of the Education Department at the end of the academic session and not the date of birth, the government could defer retirement benefits for some time.

Considering that the current 2025-26 fiscal is going to be very difficult for the cash-strapped state, the government is looking at ways and means to cut down and defer expenditure.

The government is hoping to get some respite after the 16th Finance Commission makes its recommendations for the 2026-31 period, when funds will be available after April 1, 2026.

However, the recommendations have clearly spelt out that these decisions can be taken only after assessing the adverse impact that this move could have on the unemployment scenario.

Since the number of the unemployed in the state is about eight lakh, the move to increase the retirement age could prove to be counterproductive and as such the government will have to tread cautiously.

“Though the exact amount payable to retired employees in a year has not been worked, but in case the retirement age is enhanced, payment of about Rs 800 crore could be deferred. Also an annual payment of about Rs 500 crore can be deferred for a year by linking the date of retirement of employees of the Education Department to the academic session and not the date of birth as is the practice at present,” said sources.

Another recommendation made by the sub-committee is that the retirement benefits of anyone being given re-employment by the government must be withheld till his services are done away with. This, too, will help reduce the burden for the time being.

Himachal Tribune