Govt weighs 25pc raise in basic pay of employees

ISLAMABAD: The government is considering a proposal to grant a disparity reduction allowance of 25 percent of the basic pay to civil employees with effect from March 1, The News learnt on Monday.

The finance division put forward the proposal of granting disparity reduction allowance to the employees of the federal government. “Till such time that a new salary structure is adopted on the recommendations of the Pay and Pension Commission, a disparity reduction allowance of 25 percent of the basic pay of BS-2017 may be allowed with effect from 1st March, 2021 to those civil employees in BS-1 to BS-19 of the federal government (including employees of the federal secretariat and attached departments) who have never been allowed additional salary equal to or more than 100 percent of the basic pay (whether frozen or otherwise) or performance allowance,” the finance ministry said in the proposal.

Civil employees who have never been granted an allowance equal to 100 percent of the basic pay work out to be 296,470 out of total 623,215 employees, or almost 48 percent. Currently, a pay and pension commission is formulating recommendations for adoption with effect from July 1, 2021.

The disparity reduction allowance will be granted on standard conditions and frozen at the level drawn on 1 March, 2021. The financial impact of for the allowance would be approximately Rs21 billion per annum.

“Any issues arising out of the implementation of disparity reduction allowance will be resolved by a committee to be notified by the finance division… [that] may recommend to provincial governments to consider adopting the proposed disparity allowance for their employees to be funded from provinces’ own resources,” said the document.

A structure of unified pay scales was introduced in 1972 for all government servants. However, since 2009, disparities in salaries have occurred because employees of various government establishments were allowed 100 to 300 percent of the basic pay as allowance in addition to the usual pay of the scale.

The government didn’t allow any increase in salaries of government servants in the budget for the current fiscal year of 2020/21. At the same time, tax slabs for the salaries class were revised.

“This tax revision, coupled with inflation, has had an adverse impact on government servants whose take-home salaries were actually reduced even in nominal terms,” said the finance ministry.

The matter was reviewed in the meeting of the secretaries’ committee wherein it was concluded that the salary structure of the federal secretariat has become a major impediment to attracting competent officers to work in federal ministries, according to the finance ministry. “Officers now prefer working for provincial governments, where salaries have been raised significantly. The secretaries’ committee was of the opinion that the present pay structure is not tenable and salaries of the federal secretariat require an upward revision in order to motivate and retain officers in the federal secretariat,” said the ministry.

The finance division further proposed that posts in BS-1 to BS-16 will be upgraded with effect from 1st March, 2021 and timescale promotions will be considered for adoption in the upcoming budget on the analogy of the government of Khyber Pakhtunkhwa. Various ad-hoc relief allowances will be considered for merger in the basic scales with effect from July 1, 2021.