Matter of Pay Raise for Punjab Government

Shahbaz Sharif should work with Salmaan Taseer and Federal Government to come up with a solution to financial troubles of the biggest province of Pakistan

I had written yesterday about the criticism of Chaudhry Nisar Ali Khan on the matter of pay raise of government employees and the impact it would have on expenditures of the Punjab Government. As the increase has been announced on an Ad –Hoc basis, meaning it doesn’t have to be uniform and across the board, the Punjab Government can choose to increase salaries as per their capabilities. In this difficult world, we have to manage our resources. If the Punjab Government increases the salaries, it can reduce the subsidies it is giving on “Sasti Roti-Tandoor Scheme”. It can raise provincial taxes and get it implemented throughout the province. If I were Shahbaz Sharif, I would try to find the best solution. The best solution may not be most popular but then, you have to decide between pragmatism and popularity.  Popularity can gain you temporary accolades and short term appreciation. Pragmatism will have long term impact on the financial health of the province.


Another important aspect is that PML-N shouldn’t probe a sinister motive in the announcement of the increase in salaries. It is not in favor of the federal government if Punjab is in trouble. Eventually, a bail out of Punjab would increase the domestic debt as increase in money supply will be funded by State Bank, commercial banks and national saving schemes. It would also have an inflationary impact. My suggestion is for the PML-N to sit down with the government and chalk out a strategy. One has to work to come up with  a win-win solution and it can only come up with an open and frank discussion than allegations and counter allegations. I would also suggest to involve Salmaan Taseer in discussions. Afterall, he is a renowned and self-made businessmen and his acumen can be of some use to the Punjab Government.

Pay raise to employees Punjab between ‘the devil and the deep blue sea’

Dawn – 10th June, 2010       

LAHORE, June 9: The Punjab government is doomed (economically) if it raises the salaries and medical allowance of its employees as per the announcement in the federal budget, and it is again doomed (politically) if it doesn’t.

The first option is going to cost the provincial government Rs42 billion according to an estimate of PML-N Leader of the Opposition in the National Assembly Chaudhry Nisar Ali.

And not increasing the salaries and the allowances will cost it the opposition by its nearly 740,000 employees who are determined to get the pay raise.

“This is a no win-win situation and the government appears to be caught between the devil and the deep blue sea,” a senior official of the provincial government said on Wednesday.

The exact figure of the amount which the government is to allocate for the raise in the salaries and medical allowance of its employees in the next budget is not known so far.

But the official said it could be closer to the estimates by Chaudhry Nisar who had already indicated in the National Assembly that the federal government had not taken the provinces into confidence while announcing the pay raise.

There are nearly 900,000 employees of the provincial government, having 350,000 teachers in its education sector alone.

The official said legally the province could refuse to follow the federal government announcement. But in that case the cost would be dearer than the budgetary estimates for this would mean turning the workforce against the provincial government, he added.

He said the Punjab government had already increased the salaries of police, jail officials and the judiciary. The Punjab police had 160,000 officials, making it the second largest police force in the world after those of UP, India.“Following federal government example means losing money. And not following it means losing something big (goodwill of the employees) on the political side. I think no one would like to face a defeat on the political side,” the official said.

He agreed Punjab could easily absorb the additional cost of the pay raise with the additional Rs160 billion which it is going to receive as per new NFC Award. But he said the funds which might go for the enhanced salaries could have been utilised somewhere else.

WHITEPAPER: Meanwhile, it was learnt on Wednesday that the departments concerned had been individually asked to prepare replies to the allegation of “bad governance” levelled by the PMLQ against the provincial government in its recently released ‘whitepaper’.

Official sources said the data was being collected to prove that the PML-Q had levelled ‘baseless allegations’ against the PML-N government.

“Let’s see what comes to surface after the final analysis of the data,” a senior official said when asked whether any of the allegations were true or not.



Latest Comments