Despite pay scrutiny, ministry considers extension for DG CDNS

Performance of CDNS also remained below par during the DG’s two-year tenure

ISLAMABAD: The finance ministry is mulling over giving a contract extension to the director general of national savings despite below par performance and scrutiny by the National Accountability Bureau (NAB) over his appointment at a monthly package of over Rs1.5 million.

In August 2016, the Pakistan Muslim League-Nawaz (PML-N) government hired Zafar Masud as Director General of Central Directorate of National Savings (CDNS) for two years. But before hiring him, the finance ministry changed the rules to give him a pay package that was thrice the prevailing maximum salary being paid to professionals working in the public sector, said officials in the ministry.

According to the officials, Finance Secretary Arif Ahmad Khan wants to further extend Masud’s contract which is expiring in the third week of current month. However, some senior officials of the finance ministry were not in favour of keeping him due to his remuneration package that was not defendable under present circumstances.

Last month, the Supreme Court of Pakistan directed the anti-corruption watchdog to examine employment contracts of all those contractual employees who were getting monthly salary of more than Rs1.5 million.



Officials revealed that the lump sum monthly package of the CDNS director general was around Rs1.9 million, at least three times the salary being offered to the highest management pay scale-I (MP-I) employees.

The finance ministry has already sent the case of Masud’s appointment to NAB for the reason he was getting the monthly salary above the threshold determined by the Supreme Court.

Officials said this situation was explained to the finance secretary with an advice to drop the idea of extending the service contract of Masud.

In its official response, the Ministry of Finance contended that there was no proposal under consideration to give Masud an extension.

The directorate is responsible for mobilising national savings in order to provide an alternative source of budget financing to the federal government. Pakistan has one of the lowest savings rates in the world, which limits its ability to invest in major infrastructure and social sector projects.



Hiring process

In February 2015, the Ministry of Finance advertised the post of CDNS director general and offered a pay package equivalent to MP-I as revised from time to time, according to documents of the Ministry of Finance.

At that time, the gross MP-I salary was Rs513,200, which the Ministry of Finance subsequently revised upwards to Rs699,250 in July 2017, showed the ministry notifications.

Officials said Masud declined to accept the appointment letter at that package. His file remained stuck in the Ministry of Finance for over six months and finally the ministry had to give in due to Masud’s strong connections.

The ministry amended relevant rules and issued another advertisement in July 2016 to create room for a monthly salary of around Rs1.9 million. In the advertisement, the only major change was made in the pay package that was changed from MP-I to “market-related commensurate with qualification/experience”.

The Ministry of Finance has officially disclosed details of the monthly pay package of Masud. His pay was Rs1.2 million. He was also getting house rent equal to 45% of pay, which comes to Rs540,000 and transport monetisation equivalent to MP-I (Rs97,000). These three heads bring his package to Rs1.837 million per month.



In addition to that, the ministry disclosed that the director general was also entitled to utilities, travel allowance/daily allowance on domestic official tours, official duty abroad, medical facilities, leave and gratuity.

The ministry defended the amendment to rules before appointment, saying usually the CDNS director general was appointed through promotion.

However, the post could not be filled through the regular structure for a long time. It said the selection process was followed strictly and the appointment was made with approval of the competent authority.

Officials said senior bureaucrats were not in favour of extending the contract due to below par performance of the CDNS during the tenure of Masud.

Savings mobilised through the National Saving Schemes continued to decline since fiscal year 2014-15 when they stood at Rs337 billion. In fiscal year 2015-16, net savings mobilised through the CDNS decreased to Rs233 billion.

During the two-year tenure of Masud, net savings further dipped to Rs207.6 billion in 2016-17 and then to Rs202.7 billion in 2017-18.

However, the Ministry of Finance said it was not true that the CDNS performance went down under Masud’s tenure. During his tenure, the overall “deposits of CDNS increased from Rs3.24 trillion to Rs3.649 trillion,” it added.

Published in The Express Tribune, August 7^th, 2018.

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