No pay raises for Punjab government employees

Upcoming budget to inject more cash into struggling healthcare sector

LAHORE: With a financial crisis almost crossing the red line in Punjab, the upcoming budget may not have any raises for provincial employees. In a bid to cut corners, the provincial government is mulling over several options.

According to one insider in the Buzdar government has difficult choices to make before the upcoming provincial budget.

“It appears that the provincial government will cut salaries by 5-10% or not increase at all,” the official revealed, speaking on the condition of anonymity.

According to details available with the Express Tribune, the provincial government is considering a minuscule increase in the allowances for some employees.

A second proposal recommends a 5% increase in salaries and pensions where required. Another proposal only recommends a 5-10% increase in pensions for former employees. “No decision has been taken. The provincial government is mulling over different proposals.” said one official of the Ministry of Finance.

The upcoming provincial budget, the official said, is over Rs. 23 trillion with a significant increase in healthcare spending. “Considering the spread of the Covid-19 virus, the provincial government plans to inject more cash into the struggling healthcare sector this year,” he claimed.

Exacerbated by the decline in economic activity, Punjab is dealing with a serious financial crisis. Struggling to pay its employees, pensioners, and a long list of outstanding bills, the Buzdar administration is begging for a lifeline. Last month, the most populous province in the country requested the federal government for a loan.

Loans for development

Cash-strapped and struggling to make ends meet, the provincial government is all set to seek a whopping $15 billion loan from foreign lenders.

Largest in its history, the loan is expected to be spent on development projects in the province. According to officials at the Ministry of Finance, the Buzdar administration plans to borrow Rs.96 billion for specific projects.

The government also plans to borrow Rs.41billion from foreign lenders to spend on specific provincial programs.

A sharp drop in revenue collection, coupled with reduced economic activity, has pushed Punjab’s financial woes above the crisis level.

And if there were any chances of recovery, experts said they were blown away by the spread of the Covid-19 virus, which has brought the country’s economic activity to a grinding halt.

Financially, the province has struggled for some time. According to one expert, Punjab owes over Rs. 900 billion to foreign lenders and institutions.

Forced to cut corners by the crippling crisis, the administration has placed a temporary hold on all development funds. As a result, more than 900 development projects are on hold until the province makes a financial recovery.

Published in The Express Tribune, June 6^th, 2020.