KARACHI:Government rapidly increasing pension bill as a far more serious problem than the huge power-sector debt. That might sound a bit exaggerated at a time when the government continues to make its pension payments but appears unable to liquidate the circular debt.
Pakistan Businesses Forum (PBF) Vice President and FPCCI Former Chairman Standing Committee, Ahmad Jawad said in a statement on Wednesday the time is not far off when the ballooning pension expenditure will become our biggest budgetary challenge.
Jawad said the consolidated federal and provincial governments’ pension bills have grown over sixfold, from Rs164 billion in FY2011 to almost Rs1 trillion in FY2021, even before accounting for state-owned enterprises’ (SOEs) retirement liabilities. In the same period, consolidated revenues have increased less than three times. Consequently, retirement payments as a percentage of the consolidated revenues have grown from 7 percent in FY2011 to around 17 percent presently.
The state must look to reduce its obligations by shifting from defined benefit to defined contribution pension plans. The strategy may consider rationalizing existing pension benefits.
He stated a proposal that government may call off the current pension system including in state owned enterprises especially in the tear from BPS-19 to BPS-22 or equivalent; except to accommodate the officers of BPS-16 to BPS-18 only. However for clerical cadres pensions must also continue.
“There is no need to sanctioned a huge budget annually at the stage where our tax to GDP ratio is not at par.” Jawad remarked.
As per our population, government jobs are not more than 3 percent of the total population, so why we provided a special treatment for them despite poverty in our country are its glance and hundreds of people have died annually due to lack of medical facilities, hunger, food insecurity and also due to malnutrition.
He mentioned the figures, that 16% of the population is experiencing moderate or severe food insecurity. The incidence is twice as high among the rural population, 20%, as among the urban, 9.2%. Shockingly, three out of five households, 61%, among the lowest two income quantiles in the survey, are experiencing food insecurity.
According to World Food Program (WFP) 2020 reports that over three million people in the country are experiencing severe food insecurity, mainly in the drought-affected districts of Balochistan and Sindh.
Similarly Pakistan is experiencing the phenomenon of unemployed educated people, particularly jobless graduates. The unemployment rate among degree-holders is almost three times higher than the other overall unemployed people; number of unemployed people in the country has been estimated to reach 6.65 million during the fiscal year 2020-21 and they need government stipend to afford their basic needs monthly and it could be only possible if we create fiscal space in the provincials and federal budget.