ISLAMABAD, Nov 20: The government has decided to restrict huge financial benefits to bureaucrats on becoming directors or for attending meetings of the boards of directors of Public Sector Enterprises (PSEs), including financial institutions, corporations and privatised units still having government shareholding.

Finance Minister Senator Ishaq Dar said on Wednesday the decision had been taken to “rationalise the fee of the government servants nominated by the government on boards of various public sector enterprises and corporate entities”.

Now maximum annual income to a government employee against board memberships has been capped at Rs600,000. The income over and above this level would be refunded and surrendered to the treasury, he said.

Mr Dar described the change as part of the policy which aims to enforce austerity in PSEs and maintain financial discipline by ensuring that government servants received realistic fee for their contributions.

According to an official, the government is also working to limit the membership of a bureaucrat to represent the government on a board of only one company or entity to discourage a culture of patronage under which influential bureaucrats get directorships of many companies to earn huge financial benefits and joyride trips abroad.

For example, a privatised entity still having government shareholding was paying $8,000 per meeting to all members of the board along with associated perks and facilities, including foreign visits and hotel accommodations. Such meetings usually take place four times a year to approve quarterly financial results in addition to some special board meetings, said another official.

A bank privatised a few years ago was offering $5,000 per head to board members and never held quarterly meetings inside Pakistan.

“Imagine, if an officer is a director on these two boards. His additional income would go beyond Rs5 million over and above his government salary and perks,” said the official and added that there were many officers who represented the government on the boards of 4-5 companies at one time.The practice promoted a culture of favoritism because officers used political influence to secure board positions with some even compromising government interest in the decision-making process of the companies concerned.

Some of the prominent PSEs and corporate bodies where the government has been nominating its officers on their boards are Pakistan Steel Mills, Pakistan Telecommunication Limited, United Bank, Allied Bank, Pak-Saudi Bank, Pak Libya Bank, Pak China Investment Company, Pak Kuwait Investment Company, Pak Brunei Investment Company, Saudi Pak Agricultural Company, Industrial Investment Company, Pak-Iran Investment Company, Pak-Oman Investment Company, Pak Libya Investment Company, Pakistan International Airlines Corporation, Karachi Electricity Supply Company, National Power Construction Company, Pakistan State Oil, Mari Gas Company, Pakistan Petroleum Ltd, Sui Southern Gas Company Ltd, Sui Northern Gas Company Ltd and State Life Insurance Corporation.