Telangana Releases ₹745 Crore to Clear Pending Employee Bills, Strengthens Welfare Commitments

Hyderabad, Feb 2026 : In a major relief to government employees, the Telangana government on Friday released ₹745 crore towards clearance of long-pending bills owed to its workforce. The funds were released by the Finance Department on the directions of Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka, reaffirming the government’s commitment to address employee dues in a time-bound and systematic manner.

This marks the seventh consecutive month that the state government has released substantial funds to clear pending employee bills. As part of an assurance given to employee unions, the government has been sanctioning no less than ₹700 crore every month since June last year to gradually wipe out arrears accumulated during the tenure of the previous administration.

Officials said that the consistent monthly releases demonstrate the government’s resolve to restore trust among employees and pensioners. In January, ₹720 crore was released, while in December 2025, bills amounting to ₹713 crore were cleared. By the end of June 2025, an initial amount of ₹183 crore had been released, after which the government ensured that monthly disbursements did not fall below the ₹700 crore mark from August onwards.

The pending bills largely pertain to employee-related entitlements, including gratuity, General Provident Fund (GPF) withdrawals, surrender leave encashment, and various advances. Many of these dues had been pending for years, leading to growing dissatisfaction among employees and repeated representations by unions.

The decision to clear the arrears in a structured manner was taken in the first week of June, when the State Cabinet resolved to settle all pending employee dues as of January 1, 2023, within a period of 28 months. To achieve this, the Cabinet approved the release of at least ₹700 crore every month exclusively for clearing pending bills.

This policy decision followed detailed discussions between employee unions and a Cabinet sub-committee headed by Deputy Chief Minister Mallu Bhatti Vikramarka. At the time, employee unions had threatened statewide agitation to press for the fulfillment of as many as 57 demands, with clearance of pending dues being among the most prominent. The government’s subsequent actions helped defuse tensions and establish a framework for continuous engagement with employee representatives.

Beyond clearing financial arrears, the Telangana government has also taken significant steps to strengthen social security and healthcare support for its workforce. Earlier this week, the Cabinet approved an accident insurance scheme and a comprehensive cashless health scheme for all government employees and pensioners in the state.

Under the accident insurance scheme, no premium will be paid by employees, and there will be no additional financial burden on the state exchequer. The scheme will cover 5.19 lakh regular employees and 2.38 lakh pensioners, benefiting a total of 7.57 lakh individuals. In the event of accidental death, compensation of ₹1.2 crore will be provided. In cases of natural death up to the age of 60, an additional ₹10 lakh will be paid over and above regular service benefits.

The Cabinet also approved the long-pending Cashless Employee Health Scheme (EHS), addressing one of the most persistent demands of employee unions. The scheme will cover 3.56 lakh employees, 2.88 lakh pensioners, and their dependent family members, taking the total number of beneficiaries to 17.07 lakh.

Under EHS, treatment will be completely cashless in all government hospitals as well as 652 empanelled private hospitals across the state. The scheme will cover as many as 1,998 medical procedures, significantly reducing the out-of-pocket healthcare expenses for employees and pensioners.

With the release of ₹745 crore and the rollout of comprehensive welfare schemes, the Telangana government has signaled a clear policy direction focused on employee welfare, fiscal discipline, and long-term institutional stability, while continuing efforts to resolve legacy financial obligations in a transparent and predictable manner.