Cabinet and recruitments

The Cabinet under the chairmanship of Prime Minister Imran Khan has directed ministries and divisions to fill 129,301 vacant positions within four months. This decision would not only have positive socio-economic implications for those lucky enough to be hired with obvious political implications for the government, but unfortunately a negative macroeconomic outcome that was clearly not considered by the cabinet.

A hiring freeze was considered essential by the PPP-led government (2008-13) as well as by the PML-N (2013-18) administration due to not only paucity of government resources but also due to what was acknowledged as overstaffing in the ministries and divisions. The PPP as a party has been frequently accused of using ministries/divisions/public sector entities as recruitment centres for party loyalists, a decision that has been responsible for many entities, including Pakistan Steel Mills and Pakistan International Airlines, going into the red. The fact that many of the political inductees did not meet the criteria required for the job merely exacerbated the ill-effects of overstaffing that include proliferation of ghost workers who have been supported by all major national and regional parties. Thus it stands to reason that the Tuesday 14 January 2020 Cabinet approval would galvanize many a minister and/or influential candidate to make brownie points with their constituents.

What is of significant concern however is the fact that the Establishment Division on 17 June 2019, after cabinet's approval, amended the Civil Servants (Appointment, Promotion and Transfer) Rules, 1973 by replacing the word "basis" with "through balloting" in Rule 16 (mainly for grade 1 to 5). This amendment enabled Pakistan Railways to hire an inordinately high number of people from the constituency of Federal Minister Sheikh Rashid, a recruitment that was later suspended by the Lahore High Court. It is unclear whether the suspension would extend to other ministries/divisions/SOEs but it stands to reason that the recruitment process, when completed, would be challenged in the court as there is no independent selection committee on the lines envisaged by a former chief justice with the appointment of three men of integrity overseeing the process. It may be recalled that Nawaz Sharif did appoint three men of integrity but as and when the short-listed candidates did not conform to who Nawaz Sharif wanted to appoint, its deliberations were not heeded and the three men displayed enough integrity by withdrawing as committee members.

The macroeconomic implications of a hiring drive today are obvious: raising the outlay on current expenditure with a consequent negative impact on the budget deficit. The budget for fiscal year 2019-20 envisages 30 percent higher outlay for current expenditure relative to last year, an amount that would rise, further widening the projected deficit that as per the IMF first review report is already projected at an unsustainable level of 7.6 percent. Be that as it may, the budget for the current year claims that the running of civilian government, under which the new recruitments would be paid, would decline by 6 percent in comparison to the year before while the major reduction envisaged is in non-salary outlay - to the tune of nearly 14 percent. This latter reduction is unlikely to be realized (estimated at 30,216 million rupees) and with the new recruitment in place before the end of the fiscal year running of civilian government is likely to witness a significant rise.

The rationale for the Prime Minister in approving new recruitments against vacant positions is without doubt to provide relief to some households who have been pushed down to below subsistence level due to a massive rise in inflation and unemployment in the private sector due to contractionary fiscal and monetary policies; however, the way forward should be to adjust these policies rather than to overburden the treasury which can ill afford any further expenditure-related burden at least during the ongoing year.