Guwahati, Oct. 21: The Assam government has decided to block salaries of employees who do not repay bank loans or pay for power and other services.

Finance minister Himanta Biswa Sarma told reporters here this afternoon that the non-performing assets (NPA) against personal loans financed by the Assam Co-operative Apex Bank Ltd to state government employees has reached Rs 12.63 crore as principal and Rs 8.3 crore as interest payment.

"The bank has found that most of the employees are wilful defaulters. Such acts cannot be tolerated among public servants and if action is not taken against them it will send the wrong signal to the public. If public servants do not repay bank loans, the public may raise questions as to why they should pay the same. The state government wants its employees or public servants to behave responsibly. So we have decided to block salaries of employees who have been declared loan defaulters by the Assam Co-operative Apex Bank Ltd," Sarma said.

He said similar action would be initiated against other employees if they are found to be wilful defaulters of loans taken from nationalised and other reputed banks.

The state government has nearly 4.5 lakh employees.

Sarma, who interacted with reporters after a meeting with the finance department, which was attended by heads of all other departments, said the deputy commissioners and treasury officers of all districts have been instructed not to release salaries to wilful defaulters till they settle their loans with the Assam Co-operative Apex Bank Ltd and receive a no objection certificate from the bank.

"An employee who is retiring shortly but has an outstanding loan should not be allowed to withdraw pension benefits. The deputy commissioners have been directed to fix a monthly amount which will be deducted from the pension so that the monthly pension payable to the pensioners does not fall below 50 per cent of the gross monthly pension," a finance department official said.

The finance minister said the government would also block salaries of employees who willingly do not pay bills for electricity and other services.

Sarma said the government would also do away with the existing system of retention of posts to give relief to thousands of state government employees.

"In order to remove the difficulties faced by the employees for not getting salaries on time because of the time-consuming retention process, we have removed such system, particularly in case of regular employees holding sanctioned posts. No employee will be denied timely salary because of the process of retention of posts," he said.

"From now, all posts, both under plan and non-plan, which were created with the prior concurrence of planning and development and finance departments, will be of permanent nature and no further retention will be required," he added.

He said the retention process also affects productive work (as the employee is not sure whether the post he holds will be retained or not and is, therefore, not fully involved in his work) and thus service to citizens.

Sarma said the finance department has asked all other departments to submit proposals at the earliest so that all promises made in the budget for the current fiscal could be implemented before February 2017.

The Assam government had earmarked Rs 29,000 crore in the budget for the current financial year to execute various schemes.

Sarma said Assam would gain Rs 1,500 crore as compensation from the Centre for its loss of revenue or taxes because of implementation of the GST.