LAHORE: Vice President Pakistan Businesses Forum (PBF) Ahmad Jawad has said that government rapidly increasing pension bill as a far more serious problem than power sector debt even it happens where our three million population is facing swear food insecurity.
Talking to Business Recorder here on Sunday, he said the time is not far when the ballooning pension expenditure will become our biggest budgetary challenge.
He unfold the details that the consolidated federal and provincial governments’ pension bills have grown over six fold, from Rs164 billion in FY2011 to crossing Rs one trillion in FY2021, even before accounting for state-owned enterprises’ (SOEs) retirement liabilities.
He said in the same period, consolidated revenues have increased less than three times. Consequently, retirement payments as a percentage of the consolidated revenues have grown from 7 percent in FY2011 to around 17 percent presently”
It’s time the state must look to reduce its obligations by shifting from defined benefit to defined contribution pension plans.
He also give a proposal that government may call off the current pension system including in state owned enterprises especially in the tear from BPS-19 to BPS-22 or equivalent; except to accommodate the officers of BPS-16 to BPS-18 only. However for clerical cadres pensions must also continue.
As there is no need to sanction a huge budget annually at the stage where our tax to GDP ratio is not at par”; Jawad remarked.
Similarly government jobs are not more 3 percent of the total population; so why we provided a special treatment for them; despite poverty in our country are its glance and hundreds of people have died annually due to lack of medical facilities, hunger, food insecurity and also due to malnutrition.
Jawad further mentioned that on the other hand 16% of the population is experiencing moderate or severe food insecurity. The incidence is twice as high among the rural population, 20%, as among the urban, 9.2%. Shockingly, three out of five households, 61%, among the lowest two income quantiles in the survey, are experiencing food insecurity.
He said that according to World Food Program 2020 reports that over three million people in the country are experiencing severe food insecurity, mainly in the drought-affected districts of Balochistan and Sindh.
“Country is experiencing the phenomenon of unemployed educated people, particularly jobless graduates. The unemployment rate among degree-holders is almost three times higher than the other overall unemployed people.
He said that number of unemployed people in the country has been estimated to reach 6.65 million during the fiscal year 2020-21 and they need government stipend to afford their basic needs monthly and it could be only possible if we create fiscal space in the provincial and federal budgets; he added.
Copyright Business Recorder, 2021