PESHAWAR: Govt's decision to hike expenditures - Regularizing services of contract employees
By Intikhab Amir
PESHAWAR, Dec 21: The NWFP government's decision to regularize the services of thousands of contract employees will raise its annual establishment cost in proportion to gross domestic product (GDP)
to a new height undermining its efforts to control expenditures in fulfilment of its commitments with the World Bank, sources said.
In line with its agreement with the World Bank, which is financing the NWFP's three-year roll over multi sectoral provincial reforms programme, the provincial government, according to the sources, is required not to let its establishment cost grow beyond the targeted level of four per cent of the provincial GDP.
Official circles, however, said that the decision to regularize the services of all employees appointed on contract basis since July 1, 2001, onward, entailed financial implications for the provincial kitty and would undermine the government's efforts to keep establishment cost at the desired level.
The provincial cabinet on Monday decided to regularize the services of all those employees who had been appointed on contract basis under the government's contract policies of 2001 and 2002.
The decision to regularize services of the contract employees, the sources said, would benefit thousands of employees who had been appointed in various departments and public sector entities of the provincial government since July 1, 2001 onwards.
Put in place by the last military government in the province, the contract employment policy was continued by the present government when it came in office following the 2002 elections.
Except for police department and judiciary, recruitments in all other departments and other provincial public sector entities were made on contract basis. The employees would not be entitled to pension at the time of their retirement but would only get contributing provident fund.
Under the new policy, employees would contribute 10 per cent of their monthly basic salary to the fund and an identical amount would be provided by the government as 'matching grant'.
"Though the decision would not cause much harm to the NWFP government's position in front of the donor agency because it has not given the employees the right to pension, the move entails certain degree of financial implications for the provincial kitty as the government would need to provide resources for the employees' contributing fund," said a finance manager of the province.
The government's efforts to keep the establishment cost at the desired level, in fulfilment of its loan agreement with the World Bank, had received a major set back at the time of making budget for the current financial year, when the NWFP, like other three federating units, was made to increase salaries of its more than 182,000 regular employees by 15 per cent in compliance with a decision of the federal government.
AN OFFICIAL SAID: "The provincial kitty has not been able to come out of the stress caused by the federal government's decision which raised the annual salary bill of the province by around Rs2.5 billion in a single go."
Official circles said that the decision to consider services of contract employees as 'permanent' would not affect the government's standing before the donor agency.
"As long as the move is not going to raise the annual pension bill of the province, therefore, World Bank would not have objection to it," said a finance manager, an impression dispelled by another official concerned who said that the decision had been made despite opposition by the provincial finance department which is supervising the World Bank funded provincial reforms programme.
The finance department, said sources, wanted to implement the decision on appointments made in future. "But the establishment department prevailed and got a desired decision from the government," said an official.
Sources in the establishment department, NWFP, claimed the decision would help improve 'efficiency' of the government departments and put an end to problems that were confronted to it because of service matters relating to contract employees.
"Contract employees were not covered by the Efficiency and Disciplinary rules of the provincial government, hence, the establishment department could hardly do anything when it would come to take action against any of the contract employees," said an official.
