By Khaleeq Kiani
ISLAMABAD: The joint parliamentary committee of the PPP and PML-N has taken up a proposal for a 25 per cent cut in salaries of government employees working in Grade 17 or above.
The proposal is part of a package that envisages receipt of Rs31 billion in additional taxes and a saving of Rs80 billion in federal and provincial expenditures.
A senior finance ministry official told on Wednesday that the government team, led by finance minister Dr Abdul Hafeez Shaikh, presented a set of proposals for expenditure cuts and revenue mobilisation and suggested withdrawing 50 per cent of the 50 per cent increase made in the salaries of government employees of Grade 17 and above in the federal budget for 2010-11.
This would result in an overall reduction of 25 per cent in salaries of government officers in Grade 17 and above.
He said the PML-N team, led by Senator Ishaq Dar agreed to the proposal provided similar cuts were applied across the board in salaries and perks of federal and provincial ministers, chief ministers, the prime minister and the president.
On Thursday the government team will present to the joint parliamentary committee a report on the impact of the proposed reduction in salaries for a final decision, the official said.
The proposed cuts will remain in effect for the remaining four months of the current fiscal year.
Senator Ishaq Dar told reporters that the two sides were working on an exercise the PPP-PML-N coalition government had carried out in 2008 through expenditure cuts and fresh revenue mobilisation.
He said he had shared his experience of containing the fiscal deficit in 2008 with the government team and made some proposals that the government side promised to consider and exchange more information on the suggested measures.
The joint economic revival package, expected to be finalised on Thursday, would then become the basis of discussions with a staff mission of the International Monetary Fund, most probably in the last week of current month.
Although heads of both parliamentary delegations declined to officially comment on tax measures like introduction of RGST, flood tax and increase in import duties earlier cleared by the federal cabinet, a senior official said the government was pushing the PML-N team to agree on implementation of the entire package this year.
He specifically mentioned an estimate of about Rs31 billion in fresh revenue mobilisation through flood surcharge on income and increase in excise duties on imports.
Sources said that the government side also informed the committee that it planned to save about Rs10 billion out of Rs70 billion estimated to be spent on flood-related reconstruction and rehabilitation.
Another Rs20 billion would be saved through restructuring of the Pakistan Railways, which had sought about Rs37 billion.
The sources said the provincial governments had been able to offer a cash surplus of Rs80 billion in the first six months of the current fiscal year through a squeeze on development schemes and non-salary expenditures, with Balochistan providing the highest saving.
The government side expected the provincial governments to continue this trend in the remaining period of the fiscal year.
Source: Dawn
Date:2/10/2011
