Unified Pay Scales – Increase in salary of govt employees in the doldrums
Pay and pension committee report 2012
ISLAMABAD (Daily DAWN / December 01, 2012) – An initiative by the federal government to increase salaries of civil servants before coming elections is unlikely to materialise owing to opposition from provincial governments which want increased expenditure on public welfare schemes to woo the larger number of voters, instead of permanently increasing their salary budgets.
A senior government official told Dawn on Friday that the pay and pension committee headed by former governor of State Bank Dr Ishrat Hussain had asked the regulation wing of the ministry of finance to work out a salary adjustment formula with ‘zero budgetary impact’ through merger of allowances in the basic salary and rationalisation of double and triple salaries being paid to officers working at influential institutions.
Dr Hussain had also asked provincial chief secretaries to take up the matter with chief ministers and come up with their written responses over rationalisation of salary structures at the next meeting of the commission. The commission had proposed reducing the percentage of pension being paid to retired officers to contain the pension budget.
The official said the meeting of the pay and pension commission which was originally planned soon after Eidul Azha has not taken place because of delays by the finance ministry’s regulation wing to finalise its recommendations and then non-availability of Dr Hussain due to his engagements abroad. The regulation wing had, however, indicated that salary increases through the merger of allowance was not possible without budgetary impact.
The commission has also been informed that double and triple salaries being paid to officers working in specialised institutions like the President and Prime Minister Secretariats and Federal Board of Revenue could not be withdrawn because of a Supreme Court judgement under which a monetary benefit once legally provided to government servants could not be withdrawn.
Therefore, the only option to provide equitable remuneration benefits to all was to increase salaries of other government servants, even if it was through merger of allowance in basic salary which could not be done without additional budgetary impact.
Officials said that even though formal provincial responses would be available at the next meeting of the commission expected in the second week of December, the feedback from almost all provincial governments was not encouraging. Except for Sindh’s flexible mood, all three provincial governments have opposed it.
Punjab, Balochistan and Khyber Pakhtunkhwa were of the view that the federal government had already eroded their fiscal space because of additional transfers out of federal divisible pool by increasing salaries by over 135 per cent in four years. The provinces have also reported that additional benefits to government employees could not be provided without substantially increasing salary budgets.
For instance, a one per cent increase in salary meant Rs35 billion additional impact for the federal government, Rs70 billion for Punjab and Rs70 billion for three other provinces put together.