The state of Punjab has approximately 4 lakhs employees on its rolls and around 1.5 lakh number of pensioners.

The increasing cost of pay, pension and their management/disbursement is a major concern in almost all the States in India. Using advanced computer technology in financial management for bringing a great degree of financial control and economy for the State has remained a matter of concern for Finance Department Punjab since long and Punjab government has already taken steps by introducing the ICT in its management of employees, their salary/pension but these measures have not largely proved successful and have resulted in very meagre benefits which cannot take care of mammoth requirements of a fully computerized system which can do assessment of current financial liabilities on all account of expenditure on salary, pension and other related aspects but also the future requirements of funds.

In particular, thus two key challenges can be cited here:

1. Increasing cost:

Increasing salary bills due to successive Pay commissions, and increasing number of pensioners coupled with improved life expectancy and living facilitated due to proper health facilities, is creating financial burden for the state government. However, this burden is rarely calculated accurately due to absence of any proper mechanism in force.

2. Management/ disbursement:

In the absence of any proper/computerized mechanism, there are always difficulties in ascertaining the current expenditure incurred on salary and pension on one hand and expected/projected increase in the salary, pension burden on state government. The absence of accurate information and projection often mar the financial planning on the part of the government on one hand and also government faces financial instability due to unexpected increase in DA and other benefits which become due to the employees/pensioners from time to time.