New govt yields to pressure, announces raise that will increase civilian pay bill by Rs22b. PHOTO: FILE
Succumbing to mounting pressure by government employees, the federal government on Saturday announced a 10% ad hoc allowance for both civilians and armed forces that will increase the civilian pay bill by Rs22 billion.
Finance Minister Ishaq Dar retreated from his earlier position that a salary raise was not viable due to the precarious fiscal situation and announced an increase in the salary of government employees as an ad-hoc allowance, which will not be merged into basic pay.
While addressing the post-budget press conference on June 13, Dar said after the 20% increase given in March, there was no justification for a fresh salary revision. However this budgetary move was denounced with such fervour that the government was forced to reconsider its decision and constituted a committee to review the possibility of increasing salaries.
The decision has been taken on the recommendation of the committee, which also recommended constituting a larger committee to address anomalies in the pay scales; as the salaries of the civil servants are far less than those of armed forces and judiciary.
“The government understands the problems being faced by the public servants. We wanted to give them a bigger raise but we are helpless due to the financial situation,” said Dar while announcing the decision outside the Parliament House. He claimed that since the government had only four days for budget preparation, it could not deliberate upon the matter and hence a committee was formed to review the situation.
Contrary to the minister’s claims, the ministry of finance had in fact tabled two separate proposals, either to increase salaries equal to prevailing rate of inflation (7.5%) or to give the employees a 10% raise.
Federal government employees had threatened to stage protest rallies if the government did not review its decision. The employees’ demand got a big boost when Pakistan Tehreek-e-Insaf announced to support their cause. It prompted the government to take a decision before the ball goes to the PTI’s court, said finance ministry sources.
The above committee was going to meet on Monday (June 17). However, on Friday midnight the committee was directed to meet on Saturday morning to complete the formalities, as the government had already taken the decision. The sources said the committee wanted to propose 15% increase but the senior ministry officials asked them to propose a salary raise of 7.5%.
Dar stated that the committee had proposed a 7.5% increase but the prime minister ordered to raise the salaries by 10%.
According to finance ministry officials, the raise has been given as ad-hoc relief and is not merged in the basic pay, minimising the actual benefits to the employees. The employees are already receiving three ad-hoc relief allowances of 20% of 2012, 15% of 2011 and 50% of 2010. Their merge with the basic pay will augment the pays and increase the house rent that is being worked out at 45% of the basic pay.
There is no specific head in the proposed budget for paying the 10% additional salaries, thus the requirement will be met by taking supplementary budget, which will push the overall size of the budget from Rs3.591 trillion to Rs3.613 trillion excluding the additional impact of 10% raise for armed forces.
While the finance ministry claims that it has allocated Rs25 billion for pay and pension reforms, the reality is that this chunk has been proposed to consume for 10% pension increase and paying for PM’s youth packages, the sources said.
Published in The Express Tribune, June 16th, 2013.
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