Senators decry salary disparities, warn of provincial taxation

ISLAMABAD: Legislators in the Senate expressed strong criticism of the massive disparity in pay and privileges between workers and civil servants on Friday. Concerns were raised that if such a trend continued, coupled with extravagant government spending, the provinces might begin collecting taxes independently.

Lawmakers from different parties spoke on the salary packages of officers MP-I, II, and III, the State Bank of Pakistan’s senior officers, and the pensions being paid to retired civil and military officers in dollars, who now live abroad. The entire country is facing economic challenges in terms of dollars and foreignexchange.

The subject remained the focus of the house during the question hour, with discussions on the salary packages of SBP officers presented on the floor of the Senate. Additionally, a calling attention notice was initiated by ex-Senate chairman Mian Raza Rabbani.

Referring to a recent notification from the Ministry of Finance, Rabbani expressed regret that, on one hand, electricity and gas tariffs are regularly increased at the behest of the International Monetary Fund (IMF), while on the other hand, government expenditure and elite salaries are escalating without accountability.

He pointed out the criticism that suggests the parliament is misusing funds, asserting that it is, in fact, the civil bureaucracy that is at fault. Rabbani questioned the justification for 164 retired military and civil officers residing abroad receiving pensions in dollars.

The PPP veteran lawmaker rebutted claims that the 18th Amendment, NFC, and provinces are responsible for depleting funds. He warned that unless federal government expenditure and bureaucratic salaries are controlled, provinces, especially the smaller ones, may demand to collect all taxes, redistributing funds to the federation.

Presenting a comparison between workers and civil servants, Rabbani noted that the minimum wage for unskilled workers is Rs32,000 with a Rs7,000 increase. The initial Basic Pay, BPS-1 to BPS-5 salary averages Rs14,390; BPS-5 to BPS-15 averages Rs22,840, while the basic pay of a Senator is Rs150,000.

Contrastingly, he highlighted recent pay raises for MP-I, II, and III officers, including basic salary, house rent, and utilities, as approved by the caretaker prime minister. He detailed the revised monthly packages for each scale and raised concerns about the escalating disparity.

Rabbani questioned the lavish spending and criticised the blame on the 18th Amendment and NFC. He argued that despite devolution to the provinces, the federal government continues to take away Rs200 billion from their share.

In response to his call attention notice, Interim Finance Minister Shamshad explained that the MP scale was introduced to bring professionals from the private sector into the public sector. She acknowledged technical challenges in the energy and finance sectors and clarified that the scale was introduced to modernise the structure.

Senators Mushtaq Ahmad, Palwasha Behram, and Danesh Kumar criticised the substantial salary packages, particularly questioning the justification behind senior SBP officers receiving packages up to Rs4 million per month and asking about their performance. Senator Mushtaq Ahmed claimed the government offices and residences in Islamabad were getting free electricity worth Rs10 billion annually.

During the question hour, it was disclosed that central bank employees, especially those in higher grades, were drawing monthly salaries exceeding the two-year emoluments of a member of parliament. This revelation drew sharp criticism from legislators who questioned their performance and impact on the national exchequer.

Caretaker Finance Minister Shamshad Akhtar said that SBP officers in OG-8, the highest grade, were drawing salaries ranging between Rs1.7 million and Rs3.9 million a month. She said that the salary structure had evolved over time under various governments, defending their roles in managing monetary policy and regulating the banking sector.

In a written reply, the finance minister informed the house that as of July 2023, the Chief Justice-Prime Minister’s Dam Fund held Rs11.46 billion. She highlighted that Rs6.29 billion had been received as government profit on this fund, bringing the current value of the fund to Rs17.86 billion.

She clarified that no withdrawals had been made from the dam fund, saying withdrawals could only be made based on judiciary decisions.

In response to another question, the house was informed that during the fiscal year 2021-22, Rs8.40 billion were spent on the payment of utility bills for various ministries/divisions/departments and other organisations under the administrative control of the federal government. The expenditure increased to Rs10.16 billion in the fiscal year 2022-23.

The minister explained to Senator Mushtaq that this cumulative amount encompassed all government departments. Acknowledging his proposal to reduce expenses, she assured that the principal account officers would be instructed to curtail expenditures.

The minister emphasised that the respective Principal Accounting Officer is responsible for ensuring that the allocated funds for utility bills are strictly used for their intended payments.