19 percent cut in Madras University budget; allocation of pension down 38.5 percent

CHENNAI: The University of Madras has reduced its overall budget estimate for 2026-27 by 19.2 per cent, with the sharpest reduction seen in allocations for pension and one-time retirement benefits, even as salary expenditure has increased.

The university's budget, approved at the recent Senate meeting, estimates expenditure of Rs 308.60 crore for 2026-27, down from the revised estimate of Rs 381.92 crore for 2025-26.

The reduction is largely attributed to lower provisions for pension-related expenditure. The allocation under the pension head has been cut by 38.5 per cent, from Rs 191.18 crore in 2025-26 to Rs 117.58 crore in 2026-27, a reduction of Rs 73.60 crore.

However, university sources said the reduction would not affect the monthly pension being paid to existing pensioners.

The university has earmarked Rs 100.35 crore for monthly pension and family pension in 2026-27, compared with Rs 108.83 crore in the previous year's revised estimate.

The provision is expected to cover existing pensioners as well as employees retiring during the financial year, the sources said.

The sharpest cuts are in one-time retirement payments.

The provision for gratuity has been reduced from Rs 18.73 crore to Rs 11.36 crore, while the allocation for payment against surrendered leave has fallen from Rs 35.21 crore to Rs 5.81 crore.

More significantly, the university has not made a separate provision in the 2026-27 budget for the lump-sum amount paid to employees who opt to commute a portion of their future pension at the time of retirement.

A separate allocation had been made for such payments in the previous year's budget.

No specific provision has been made under this head in the current budget.

University sources, however, said the absence of a separate allocation did not mean that employees retiring during the year would lose their retirement benefits.

Such payments could be met from the university's existing corpus fund when they become due, they said.

The university is also expected to receive government funds towards such expenditure, the sources added.

The latest budget estimates also show that the university's salary expenditure is set to rise from Rs 96 crore in 2025-26 to Rs 106 crore in 2026-27.

The university had recorded an actual expenditure of Rs 267.81 crore in 2024-25.

Its budget estimate for 2025-26 was Rs 335.45 crore, which was subsequently revised upwards to Rs 381.92 crore.

The lower allocation for pension and retirement-related expenditure comes at a time when the university is facing financial pressure and has been relying on its corpus fund to meet some of its expenditure.