In what appeared to be a last-minute change, Finance Minister Ishaq Dar on Tuesday announced an increase of Rs2,000 in the minimum wage rate, taking it to Rs12,000 from the existing rate of Rs10,000.
His written speech, however, did not state the same figures. According to the speech provided to the media in Parliament House, the minimum wage was due to be increased by Rs1,000. “For welfare of the labour class, and in line with the increase in pay of government employees, the minimum wage rate is also being increased from Rs10,000 to Rs11,000,” said the written speech.
It is unclear whether figures from the official documents – as the written speech is part of the budget documents – or the minister’s announcement on the floor of the National Assembly should be followed. While the government has constituted the minimum wage, there is seemingly no mechanism through which checks and balances can be implemented in order to check if the guidelines are followed. The matter, after the 18th constitutional amendment, has been delegated to the provinces.
Increase in salaries
In anticipation of the backlash that was experienced when the previous budget was announced, the government this year announced that “a 10 per cent ad-hoc relief will be allowed to all federal government employees with effect from 1st July 2014”.
In real terms, the increase is not substantial, as inflation is estimated at 8.7 per cent and a 10 per cent increase reflects the addition of only 1 per cent in the remuneration of public servants. The minister did not miss an opportunity to make a dig at the previous government, commencing his speech with a flashback to the economy’s ‘dilapidated condition’ when the Pakistan Muslim League-Nawaz took over the reins of power. He went on to announce relief measures for government employees, pensioners and labour, saying, “As you know, we are still in the stablisation mode as we are focusing on reducing public expenditures. However, it is imperative that we do the bare minimum that is possible within the limited resources available especially for lower grade employees.”
These relief measures include a 10 per cent increase for those employees of Grade 1 to 15 drawing a fixed medical allowance of Rs1,000 per month and a 5 per cent increase in the conveyance allowance for these employees. The post of superintendent is being upgraded from Grade 16 to Grade 17. Also, one premature increment will be allowed to employees of Grade 1 to 4.
“Last year, I had raised the minimum pension for government employees from Rs3,000 per month to Rs5,000, representing an increase of 67 per cent,” Dar recalled. “Considering the difficulties faced by low-pension employees, I am announcing a further increase of Rs1,000 in minimum pension to make it Rs6,000.” The pension rate was thus doubled, Dar said, since July 1, 2013. A 10 per cent increase in pension will also be allowed to all retired federal government employees, he added.
Published in The Express Tribune, June 4th, 2014.