Govt increasing pension bill far serious issues than power sector debt

ISLAMABAD (INP): Vice President Pakistan Businesses Forum (PBF), Ahmad Jawad has said that the government’s rapidly increasing pension bill is a far more serious problem than the huge power-sector debt.

Talking to media persons here on Sunday, he said that the time was not far when the ballooning pension expenditure would become our biggest budgetary challenge.

Jawad unfold the details that the consolidated federal and provincial governments’ pension bills have grown over six-fold, 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”

It’s time the state must look to reduce its obligations by shifting from defined benefit to defined contribution pension plans, he added.

The PBF Vice President put forward 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.

As there is no need to sanction a huge budget annually at the stage where our tax to GDP ratio is not at par, he remarked.

Similarly, Jawad said government jobs are not more 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.

The former chairman FPCCI Standing Committee 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 quintiles 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.

However, Jawad said, 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 provincial and federal budgets, he added.