Govt lifts cap on bureaucrats' fee

ISLAMABAD:

The federal cabinet has withdrawn its one-year-old decision to cap the board fees of top bureaucrats at a cumulative Rs1 million per annum after an overwhelming majority of them did not obey the decision.

Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar were the driving force behind the federal cabinet's decision in June 2024 to limit the fee at Rs1 million and surrender the surplus amount to the national kitty.

The board fee goes as high as $5,000 for one board in certain cases, while in the majority of cases, the fees for attending one board meeting of some government-owned enterprises range from a few thousand to hundreds of thousands of rupees.

The cabinet division withdrew its decision on June 22, according to a notification issued by the finance ministry this month.

"In pursuance of the Cabinet Division decision dated 22-06-2025, the Finance Division's letter dated 10-07-2024 and Office Memorandum stand withdrawn ab-initio," reads the notification.

In June last year, both the prime minister and the deputy prime minister held the view that these bureaucrats should keep only a portion of the hefty board fees and surrender the remaining amount to the exchequer.

The premier had serious objections to bureaucrats receiving up to $5,000 or Rs1.4 million for a single board meeting. At least two government entities, Pak-Arab Refinery Limited (PARCO) and Pakistan Telecommunication Limited (PTCL), pay around Rs1 million or more in fees for every board meeting.

The secretaries of finance, petroleum, privatisation, and information technology are members of these boards. There are also boards where the fees range from Rs100,000 to Rs250,000 per meeting.

In 2023, then-finance minister Ishaq Dar had announced that government servants should retain a maximum of Rs600,000 annually in board fees and deposit the rest. However, this decision was never implemented.

The finance ministry has also withdrawn its office memorandum, which stated: "It has, therefore, been decided to reiterate those instructions that the government servants appointed to the Board of companies, organisations, and who become entitled to fees, shall only be allowed to retain remuneration to a maximum of Rs1 million in a financial year. Any amount more than Rs1 million so received shall be deposited by the officer in the government treasury, and a record of the same shall be promptly provided to the administration wing of the respective Ministry and Division."

Since hardly any bureaucrats complied with the decision, the cabinet decided to withdraw last year's decision ab-initio, as if it had never been taken.

Austerity measures

The finance ministry also notified the continuation of austerity measures for the fiscal year 2025-26. The austerity measures will also apply to all federal government-attached departments, state-owned enterprises, and statutory bodies, including regulatory authorities.

In the case of SOEs, these austerity measures will be considered a directive of the federal government under Section 35 of the SOEs Act of 2023 and under relevant sections of their respective organic laws for statutory bodies, according to the notification.

These measures are introduced annually to reduce expenditures across various government departments, including the abolition of vacant positions, a ban on the purchase of new vehicles and machinery, and restrictions on officials' foreign travel.

The austerity measures were adopted to control government expenditures. Under these measures, the government banned the purchase of new vehicles and equipment for various departments.

The notification stated that only operational vehicles, such as ambulances and other medical equipment vehicles, fire engines, buses and vans for educational institutions, solid waste vehicles, and motorcycles, could be purchased if needed.

However, the government of Prime Minister Shehbaz Sharif has purchased vehicles for federal ministers and officers of the Federal Board of Revenue (FBR). FBR vehicles bearing the FBR logo, bought last month, can be seen being irregularly used by officers for private purposes.

Similarly, the purchase of machinery and equipment for various government departments would also be prohibited. The notification clarified that only machinery and equipment needed for hospitals, laboratories, agriculture, mining, and schools could be purchased.

The ministry also imposed a ban on the creation of new posts and temporary posts, except for positions under Public Sector Development Project (PSDP)-funded projects. According to the notification, all posts lying vacant for the last three years would be abolished.

Procurement of goods under PSDP-funded projects would be exempt from this ban. Additionally, there would be a complete ban on government-funded treatment abroad and all unnecessary foreign trips.

Ad-hoc salary notification

The finance ministry has also notified a 10% salary increase for Armed Forces personnel, Civil Armed Forces, and all civil employees of the federal government, as well as civilians paid from defence estimates and contract employees employed against civil posts in basic pay scales under standard terms and conditions. The decision had been announced in the budget.

The finance ministry also notified a 7% increase in net pensions for all civil pensioners of the federal government. The increase will also apply to family pensions granted under the Pension-cum-Gratuity Scheme, 1954, and Liberalised Pension Rules, 1977.