25pc Disparity Reduction Allowance: Exchequer to bear Rs30 bn cost on per annum basis

ISLAMABAD: The government’s decision for providing 25 percent Disparity Reduction Allowance to public sector employees from grade 1 to 16 will cost the national exchequer to the tune of Rs30 billion on per annum basis.

For the four months period with effect from March 1, 2021 to June 30, 2021, its cost to the national exchequer will be standing at Rs10 billion for the current fiscal year. It will be challenging for the government that how it is going to satisfy the IMF because the Fund had sternly opposed granting this raise on eve of the last budget for 2020-21.

A top government official disclosed to The News on Friday that they had convinced the IMF for granting a substantial raise to public sector employees in the next budget for 2021-22 but this sudden decision was taken after violent protests in Islamabad after the Federal Secretariat was besieged, which created an awkward situation for Pakistani negotiators with the IMF who were making last ditch efforts to revive the stalled IMF program. “We don’t know how we will be able to convince the IMF for this sudden change of mind and hearts,” said the official.

It was the IMF which had forced the government for not hiking salaries and pensions of the government officials, arguing that Pakistan would have to stick to the financial discipline to remain within the fold of Fund's program. But the official argued that there was an agreement in principle that the salaries and pension would be increased significantly in the coming budget. But this sudden decision would compromise the credibility of the negotiating team.

It was learnt that the dwellers of Q Block (Finance Ministry) were perturbed because of two fiascos, one that occurred on account of placing the F-9 Park as guarantee and second in the shape of granting sudden raise in salaries.

There is no doubt that there are distortions in salaries and other perks and privileges within the domain of the public sector as employees working at few places were getting double and in some cases triple salaries, having no justification. That’s why the Ministry of Finance proposed this 25 percent raise as Disparity Reduction Allowance. There is a need to grant raise to salaries of Pak Army jawans who are fighting for the country but there are other departments such as NAB where there is no justification to provide extraordinary perks and privileges.

The Finance Division has agreed in principle for providing the following:

a) Disparity Reduction Allowance @ 25% of the basic pay of BPS-2017 shall be allowed to those civil employees in BPS (1-19) of the Federal Government (including employees of Federal Secretariat and attached departments) who have never been allowed additional salary equal to or more than 100% of the basic pay (whether frozen or not) or performance allowance w.e.f. 01 March, 2021.

b) The posts BPS (1-16) or equivalent will be upgraded on the pattern of Government of Khyber Pakhtunkhwa w.e.f. 01 March, 2021.

c) The grant of time-scale will also be considered for adoption on the same pattern in the next budget.

d) Ad hoc Relief will also be considered to be made part of the basic salary w.e.f. July, 2021.

e) The provinces will be recommended for adoption of above from their own resources.

A summary to the effect is being placed before the cabinet for requisite approval.

When this scribe sent out a questionnaire to IMF Resident Chief in Pakistan for inquiring about Fund's view regarding salary increase of public sector employees on Thursday, no response was received.