The Mizoram government will defer the release of salary of employees as part of austerity measures to deal with the economic slowdown caused by the novel coronavirus outbreak, chief minister Zoramthanga said on Saturday.

He said his government had been grappling with a financial crisis with a plunge in post-devolution revenue deficit grant, share of taxes received from the Centre and also decline in GST collection and own revenue owing to the lockdown.

“The state cabinet on Friday decided to defer five to 15 per cent of the employees’ gross salary as an austerity measure to deal with the economic fallout of Covid-19. This does not mean the government is giving a pay cut but it would be paid once the financial condition improves,” Zoramthanga told reporters.

He said the finance department has been directed to determine the portion of salary deferment based on the category of employees and to ensure that nobody, especially group D employees, are inconvenienced.

As payment of salary alone leads to around Rs 290 crore expenditure in a month, there is a need to check the outflow by limiting the salary outgo, he said.

There are 41,777 regular employees of the state government. Of this, 6,112 are group A, 14,363 group B, 18,363 group C and 2,939 group D employees.

Apart from them, there are thousands of contractual and muster-roll employees.

Zoramthanga, who also holds the finance portfolio, said his government would enforce budgetary cuts by reducing office and travel expenses, reduction in supplies, materials, grants-in-aid, major works, minor works and also reduction in entitlement of telephone or Internet bills and petrol or diesel (POL) entitlement per vehicle, among others. The budgetary cuts will result in savings of around Rs 190 crore, he said.

Zoramthanga also said the government would give top priority to public health, foodgrains and communication in order to survive amid the Covid-19-induced economic crisis.

He said the upgrade of Lengpui airport was under way and repair of the road between Khamrang and Buichali on National Highway 306 and diversion road to Bairabi railway station would be undertaken to ensure smooth supply of goods during the monsoon.

Taxation minister Lalchamliana, who accompanied Zoramthanga, said the government has decided to hike diesel and petrol prices by 2.5 per cent and five per cent respectively, from June 1.

He said the state cabinet on Friday decided to increase the VAT on diesel from 12 per cent to 14.5 per cent and on petrol from 20 to 25 per cent. Diesel prices would increase from Rs 60.49 to Rs 62 per litre and petrol from Rs 66.54 to Rs 69.87, he said.

According to Lalchamliana, the GST collection had dipped from Rs 48 crore in March to Rs 14 crore in April.

He said the post-devolution revenue deficit grant received from the Centre in April was only Rs 188.50 crore compared to Rs 226.33 crore it used to receive in a month during 2019-20.

He said the share of taxes received from the Centre in April was only Rs 232.96 crore against an estimated Rs 283.42 crore per month for 2020-21.