The Senate Standing Committee on Finance has recommended that allocation for running of civil government be increased to Rs 247 billion against Rs 239 billion provision in budget for 2012-13 as the Cabinet decision to increase 20 percent salaries of employees against 15 percent proposed by the Finance Ministry would have Rs 8 billion additional impact on the budget.
However, the committee meeting presided over by Nasreen Jalil rejected with a majority vote proposal of Pakistan Muslim League (N) and Muttahida Qaumi Movement (MQM) to increase minimum wage at least to Rs 9000 per month following strong opposition by Senator Ilyas Bilour and other senators. Ishaq Dar of PML-N and Nasreen Jalil, Chairman of the Committee from MQM supported the proposal whereas other members strongly opposed raising minimum monthly wage to Rs 9000.
Earlier, officials of the Finance Ministry informed the committee that an allocation of Rs 139 billion for the next year was based on 15% increase in employees salaries. The impact of 15% increase in government employees' salaries in the budget was estimated at Rs 35 billion for the next fiscal year. However, the decision of the Federal Cabinet to allow 20% salary increase would add Rs 8 billion impact on the budget and the government would be requiring Rs 43 billion for the next fiscal year against budgetary allocation of Rs 35 billion. Advisor to Ministry of Finance Rana Asad Amin informed the committee that civil government expenditure with 20 percent salary increase would now be Rs 247 billion against a provision of Rs 239 billion in the budget for the next fiscal year. Thus the committee recommended unanimously to the National Assembly that civil government expenditure for 2012-13 should be raised to Rs 247 billion from Rs 239 billion.
The committee also recommended that in order to ensure the outstanding receipt of Rs 75 billion from M/s Etisalat, the federal government must take immediate measures against all "grey traffic" in the country. The government has been asked to promote agriculture reforms in order to give incentives to small farmers and rural women, encourage co-operative farming and distribute state land among landless peasants and promote microfinancing and venture financing. The committee recommended to the National Assembly that the government may promote the establishment of small and medium enterprises and patronise domestic and agro based industry in the country. The committee also recommended that the government may promote through special incentives the establishment of value added and labour intensive industry in the country. The Senate recommends to the National Assembly that the prime rate (KIBOR) in the country be reduced to 9 percent to facilitate the revival of economic activity.
The government may adopt austerity measures, reduce non-development expenditure and eliminate VIP and VVIP cultures and the Ministry of Finance may present broad parameters of the budget in March every year and detailed budget by mid May every year in both Houses of the Parliament for pre-budget discussion.
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