Authoritarian governments try to win over their employees with salary increases, more so if it is an election year. But the state cannot afford large increases in emoluments of its employees. If the salary increase is too low, it has no impact on the employees and if it is too high, financial resources of the state are strained.
In Pakistan, the total number of federal, provincial and local employees is about four million besides several million pensioners including the military pensioners .
In the distant past, salaries were raised often but not pensions. In recent times, the rise in pension followed the rise in salaries as inflation hits pensioners too hard. Now the pensions have been raised by 10-15 per cent. This year, pensions of those who retired before July 1st 1997 have been increased by 20 per cent and those who retired thereafter by 15 per cent. That is because salaries and pensions before 1997 were too low.
The government also gives plot of land to its employees but as the number of plots available is not too many and applicants very many, many of employees are disappointed. Those who get the plots are lucky.
The government is also increasing grades of various groups of employees as to raise their salaries. Raising those in grade 11 to grade 14 is quite a rise. The pay rise has implications far beyond the salary bill so the former finance secretary and present auditor-general Tanvir Ali Agha proposed that the pay increase this year should not be treated as a salary rise but as a special dearness allowance . He did not want to enhance other payments received by an official on the basis of his salary bill but the cabinet did not agree. He had also suggested that the rise in payment should be 10 per cent but the government chose to make it 15 per cent.
A direct result of making the pay rise as part of the salary is that the house rent allowance will cost the federal government Rs1 billion ; and it will cost the provincial governments Rs3.4 billion-a total of Rs4.4 billion .
The provinces do not have the money to make such extra payments so they will ask the centre for more financial support. If it is not available in the form of a grant, it will be sought as a loan.
What has happened after the pay rise is that prices have shot up even before the enhanced salary could impact the market.
Food prices have risen far higher as a result. The market makes its own rules heedless of the human hardships. Palliatives are not enough to fight inflation.
It has to be fought upfront and hoarders and profiteers have to be punished for their anti-social deeds.
A new cabinet committee has been set up with the prime minister as its chairman to fight inflation and devise future remedies. It has also key economic ministers like the minister for commerce and the minister for industry and production apart from the advisor to the prime minister on finance, Dr Salman Shah.
Will this high ministerial committee succeed while the committee headed by the advisor to the prime minister on finance failed?. Anyway, the new committee must find a solution to the soaring inflation..
The salary rise has many other implications. Pensions go up along with the rise in salaries of federal, provincial and local government employees. Provinces are not able to pay pensions on time. They may delay payments even further now until the centre helps them.
Other allowances of the government employees including touring allowances based on their salary will rise. What is the total impact of the pay rise inclusive of all its fall out is not clear..
What the country needs and the people ought to know is the total number of federal, provincial and local government employees. Their figure should be published year after year along with the budget. We can then know whether the number of government employees is rising or falling and whether the large expenditure on the bureaucracy is justified.
Some employees are no longer in the employment of the government following privatisation of their institutions. What exactly is their total number? A huge supplementary budget which the National Assembly dumbly passes year after year, arguing it is no use crying over split milk.





























