News
Sunday, May 16, 2010
Finance Ministry slashes Pay and Pension Package to just Rs 45bn* Political leadership demands ministry increase budgetary allocation for government employees
By Sajid Chaudhry
ISLAMABAD: The Ministry of Finance has cut down the Pay and Pension Package recommended by the Pay and Pension Commission from Rs 105 billion to just Rs 45 billion, owing to financial constraints, official sources informed Daily Times on Saturday.
The Finance Ministry has directed the relevant authorities that only Rs 45 billion would be available for the implementation of the proposed Pay and Pension Package, official sources said.
Relief: However, the political leadership of the country is unsatisfied with the reduction in the proposed package, and has demanded the Finance Ministry increase budgetary allocations to provide relief to government employees, who were suffering because of high inflation, the sources said.
A decisive meeting on the implementation of the Pay and Pension Package for the fiscal year 2010-11 is expected to be held after the return of the adviser to the prime minister on finance from Doha, where details of the upcoming budget would be shared with the International Monetary Fund (IMF). Prime Minister Yousaf Raza Gilani would chair the meeting for the finalisation of the proposed Pay and Pension Package.
According to sources, in a recent presentation on proposed pay and pension reforms, the PM rejected the scheme for merging government pay scales, reducing them from 22 to just 14, due to several ambiguities.
However, the recommendations of the report to double the basic salary of civil servants has been accepted by the PM. The sources in the Finance Ministry revealed that the practical impact of a 100 percent basic pay increase would be on average, a 20 to 40 percent increase in the basic salary of the employees.
“The government employees will receive an increase of 20 percent to 40 percent depending on their seniority because the government will withdraw the interim relief that is current provided to the government employees after the salary increase is formally announced,” said a senior Finance Ministry official.
“But the opposition to the report has been coming from the top bureaucracy and there were multiple briefings given to the prime minister over the report of the commission,” an official said, adding that the merger of pay scales was a ‘nonviable option’.
Despite the claims by Dr Hafeez Sheikh – the adviser to the PM on finance – that monetisation is essential for restructuring the government machinery, the top bureaucracy has strongly opposed the monetisation of houses and vehicles.
According to the monetisation plan, the civil servants would be given a fixed stipend instead of the official residence so that the government could utilise the large residences for generating money through commercial ventures.
The monetisation of vehicles would take away all vehicles provided to the civil servants and the government officials would only receive a limited amount of money for their travel expenses.
A Finance Ministry official confirmed that the majority of the Pay and Pension Commission’s recommendations would not be implemented for another fiscal year.
Courtesy www.dailytimes.com.pk