EDITORIAL: Government and opposition parliamentarians, in a rare show of unanimity, sought a pay rise commensurate to that of a federal secretary, a demand approved by the Finance Committee as required under a private member’s bill passed on 20 January 2025.
Previously, a raise was implemented through amendments to the members of Parliament Salaries and Allowances Act.
The members had reportedly requested a raise to one million rupees a month; however, Speaker Ayaz Sadiq opposed it. In effect this decision implies a raise from the existing 188,000 rupees per month (including 38000 rupees in allowances) to 519,000 rupees per month — a rise of 176 percent.
Ostensibly the reason is the high rate of inflation; however, three factors need to be taken into consideration.
First and foremost, the economy remains fragile and there is increasing concern that the failure of the Federal Board of Revenue to meet its budgeted targets of 6009 billion rupees for July-December 2024 with a shortfall of 386 billion rupees would lead to the implementation of the contingency plan (read minibudget) that has already been agreed with the International Monetary Fund under the ongoing Extended Fund Facility programme.
The fact that our taxes remain skewed heavily towards indirect taxes (to the tune of 75 to 80 percent) whose incidence on the poor is greater than on the rich (as is the case with the taxes agreed in the contingency plan) would fuel poverty levels further from the existing high of 41 percent, comparable to Sub-Saharan Africa.
Second, it must be borne in mind that the government budgeted a 20 to 25 percent increase in the salaries of civilian and defence personnel this year which many consider was unwarranted not only because it contributed to a raise in current expenditure by 21 percent this year, a highly inflationary policy, but also because: (i) this raise was for 7 percent of the workforce only while the remaining 93 percent operating in the private sector have not witnessed a pay raise for the past four to five years due to contracting large-scale manufacturing sector and floods; and (ii) it was at the taxpayers’ expense subjected to ever rising utility tariffs as part of the IMF conditions which has eroded the general public’s acceptance of a salary increase of those who represent (parliamentarians) and serve them (bureaucrats).
One must support the ongoing rightsizing efforts and there is much talk of not filling vacant posts (estimated at 150,000 in the Centre) with data revealing that the sanctioned strength is 1.2 million while working strength is 947,610.
However, the 21 percent vacancies that have not been filled date back from 2022-23 and mostly comprise of vacancies in the federal government while corporations and autonomous bodies have still not been touched.
One would hope that as and when restructuring and privatisation measures begin to lead to positive results there will be retrenchments. Be that as it may, the concern is that if the government continues to raise salaries at such a high annual rate then surely the rightsizing measures may raise and not reduce the total outlay on salaries of government employees.
And finally, parliamentarians are paid a monthly stipend to enable them to bear the cost of their attendance in parliament with the overarching objective of representing their constituents.
Sadly, the passage of recent legislation, including Prevention of Electronic Crimes Act and the 26th Constitutional Amendment, are more reflective of politicians’ compulsions rather than those of their constituents.
To conclude, while a case for a salary increase of parliamentarians based on inflation can be made yet one would have hoped that they had deferred their demand and subsequent approval till such a time as the economy had become less fragile indicated by an upgrade in our ratings by the three international rating agencies, achieving and not merely budgeting a sustainable fiscal deficit, and, last but not least, having foreign exchange reserves that are due to exports and remittance inflows rather than debt-based as at present.
Copyright Business Recorder, 2025
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