A finance department official told The Express Tribune on Monday that the government faced the prospect of Rs569 billion in expenses during the next fiscal year against a revenue stream of no more than Rs566 billion.
He said that the government had planned to announce a 15 to 25 per cent raise in salaries, 15 to 20 per cent in pensions and doubling of the medical allowance.
This would result in an additional expense of Rs60 billion. The figure is based upon 1,050,000 employees, excluding 209,054 officials of three departments –Police (180,721); jails (10,826) and judiciary (17,507) –where raises have already been given.
This would increase the current expenditure on salaries and pensions from Rs314 billion (for 2009-2010) to Rs374 billion.
Besides, the government had planned to increase the allocation for the Annual Development Plan (ADP) from Rs175 billion to Rs195 billion.
To cover the ADP and current expenditure allocations, the government was banking on generating Rs130 billion from indigenous sources and receiving Rs436 billion from its share in the federal divisible pool under the new National Finance Commission (NFC) formula.
Given the current state of affairs, the government finds itself forced to slash its development spending or the current expenditures by at least Rs3 billion to present a balanced budget. An official at the chief minister’s secretariat told The Express Tribune that the ruling party was concerned that its political image would take a blow if it presented a deficit budget.
He said that some sections of the bureaucracy were pressuring the government to withdraw the Rs8 billion subsidy for the Sasti Roti scheme. They argued that the subsidy was untargeted and its withdrawal was a good way to balance the expenses and the revenue.
Published in the Express Tribune, June 8th, 2010.
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