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Govt retreats on salary, Benazir’s name

June 16, 2013
Finance minister Ishaq Dar.—File Photo
Finance minister Ishaq Dar.—File Photo

ISLAMABAD: Facing a furious opposition in parliament at the beginning of the debate on the new budget, the government had to make an early retreat on Saturday when it announced 10 per cent increase in salary of its employees and withdrew its decision to change the title of the Benazir Income Support Programme by omitting the name of the former prime minister whose PPP had introduced the gigantic poverty alleviation plan during its last tenure.

Both the decisions, apparently an exercise in damage control and coming just three days after the new government presented its first budget, were announced in the National Assembly by Finance Minister Ishaq Dar.

But the salary raise failed to satisfy opposition lawmakers who called for a higher increase in view of the price hike caused by budgetary measures like an increase in General Sales Tax (GST). The salary issue echoed also in the Senate.

The leader of opposition in the National Assembly, Khursheed Ahmed Shah, and Senator Raza Rabbani, parliamentary leader of the PPP in the upper house, opened the debates in the houses on the budget for 2013-14 which, they said, was meant to benefit the rich rather than the poor or middle class, a charge rejected by treasury benches.

The abrupt start of collection of the GST at the new rate of 17 per cent — as provided in the new Finance Bill — sparked a walkout in the National Assembly by the Pakistan Tehreek-i-Insaf (PTI) whose parliamentary leader Shah Mahmood Qureshi said the collection before the adoption of the bill by the lower house was a violation of the constitution.

Mr Dar and Law and Justice Minister Zahid Hamid justified the collection by referring to a British-era Provisional Collection of Taxes Act which authorised the government to do so. They said this (the collection) had often been seen in the past, in Pakistan and “its neighbourhood”.

Mr Qureshi refused to buy the argument and asked his party’s lawmakers to stage a walkout. However, the PPP, the main opposition party, did not join them and Mr Shah opened the debate in their absence.

He urged the treasury benches to bring the PTI members back to the house. Some government ministers and members belonging to the ruling PML-N tried to persuade the protesters to return to the house but to no avail. Taking benefit of a break in the proceedings during ‘Azan’ for Zuhar prayers, Mr Shah and former speaker of the house Dr Fehmida Mirza went to an adjoining lobby where PTI legislators were sitting and successfully convinced them to rejoin the proceedings.

Before the resumption of the debate, the finance minister announced that the government, which had refrained from announcing annual salary increase in the budget, had decided to increase the salaries by 10 per cent after seeking guidance from Prime Minister Nawaz Sharif, although a committee set up to review the issue after the announcement of the budget had, in view of the financial situation, recommended only a 7.5 per cent increase which would have cost Rs16.5 billion.

After the PTI walkout following a fierce censure by Mr Qureshi who termed GST collection at the new rate before the start of the new fiscal on July 1 “a proof of the hollowness of a Taj Mahal of hopes you (Nawaz Sharif) had built”, and a demand by Awami Muslim League leader Sheikh Rashid Ahmed for an increase in salaries by up to 20 per cent, the minister said the salary issue could be reviewed again by the time he would wind up the budget debate “if some space is available”.

It was during Khursheed Shah’s speech when he deplored the omission of the name of the assassinated former prime minister from the title of the Benazir Income Support Programme in the budget speech that Mr Dar interrupted him to say that the programme, for which Rs75 billion had been allocated, would retain the “same name”.

Criticising the budget which, he said, was “neither a poor man’s budget nor of the labourer”, Mr Shah regretted that the finance minister had not “said a word” about peasants in his budget speech and allowed duty-free import of costly hybrid cars but did not exempt bicycles from sales tax. He rejected the minister’s claim that the new government had inherited an “empty treasury” and said that almost all finance ministers, including Mr Dar when he held the same portfolio for some months in the previous PPP-led coalition government, had said the same thing in the past.

The parliamentary leader of the Muttahida Qaumi Movement, Dr Farooq Sattar, also joined the tirade and said: “The budget reflects a privileged mindset and has the potential of unleashing a tsunami of inflation.”

Before the assembly was adjourned until 11.30am on Sunday, a stout defence of the budget came from Planning and Development Minister Ahsan Iqbal, who cited seven priorities of the government: revival of energy security, stabilisation of the economy, private-public partnership, infrastructure building, restoration of peace and security, institutional reforms and human resource development.

In the Senate, main attack on the budget came from Senator Rabbani who regretted government failure to fix a higher minimum wage for workers from the present PPP-fixed Rs8,000, and said the budget reflected a “clear trend towards corporate elite” at the cost of the working class.