Salaries of government employees to be increased next year: Dar


ISLAMABAD: The newly elected Pakistan Muslim League-Nawaz (PML-N)-led federal government would increase the salaries of government employees next year, the Finance Minister Ishaq Dar said on Thursday.

“The government will ensure strict fiscal discipline and transparency to put the country on the path of economic stability,” Dar said while addressing a post-budget news briefing in Islamabad on Thursday.

The finance minister assured that ambitious targets set for the next fiscal year will be achieved at all costs.

“We have tried to give economic direction to the country through the new budget,” he said.

Dar rejected the impression of heavy taxation saying increase of one percent in General Sales Tax (GST) is not a big difference. He said we have tried not to put burden on the people. He said reforms will be introduced in the FBR and leakages will be stopped to enhance revenue collections.

“A slab of 30 percent income tax has been introduced only on those having more than seven million rupees annual income. The number of such people is three thousand one hundred and fourteen,” he said.

“Rs40 billion rupees would be generated through austerity measures.”

The Finance Minister said that the number of people living below the poverty line has doubled during the last five years. The revenue to be collected from the increase in income tax would be spent on the welfare of the poor people through Income Support Program. He said monthly installment has been increased from 1000 to 1200 rupees under this program. He said the volume of this program for the poorest segment of the society has been increased.

Ishaq Dar clarified that no tax has been imposed on the intending pilgrims rather tax has been proposed only on the Haj tour operators who are making money.

Highlighting targets of the government‚ the finance minister said GDP growth of four point four percent has been set for the next fiscal year which will be increased to seven percent by 2016. He emphasized that increasing the GDP growth to seven to eight percent is imperative for reduction in inflation and fiscal deficit.

The minister said inflation will be maintained at single digit while investment to GDP will be increased to 15 percent during the next fiscal year.

He said remittances are projected at fourteen billion dollars this year while these are likely to remain fifteen billion during the next fiscal year. These remittances will be increased to twenty billion dollars in the next three years. Fiscal deficit will be reduced to 6 in the next year and to four percent by 2016.

He said debt to GDP will be reduced to 61.2 percent by the next fiscal year.

Responding to a question about zero raise in salaries of government servants‚ the Minister said pension has been increased by ten percent besides minimum pension to five thousand rupees from three thousand.

Dar said the government has given this budget in difficult economic situation but assured that the employees will definitely be compensated in the next budget. He said it was not possible to give raise to the employees at this time when they have already been given 20 percent allowance three months ago.

To another question‚ Ishaq Dar said the net volume of the debts will not be allowed to increase despite IMF will be consulted. He assured IMF will be consulted prioritizing the national interests on top instead on the dictated terms. He said IMF team for Post Program Monitoring talks will arrive in Islamabad on 19th of this month.

Answering another question‚ the Finance Minister said that “the problem of load-shedding would be overcome to some extent after clearance of circular debt within the next sixty days.”

To another question‚ he said that steps would be taken to improve situation in Balochistan. The PML-N despite majority party in Balochistan Assembly invited National Party of Mir Hasil Bizinjo to form government in the province.

Moreover, he said that seventy five billion rupees have been allocated in the new budget for the Higher Education Commission. Finance Minister said the government will increase salaries of the government servants from first of July 2014.

He said the decision was made keeping in view the ground reality‚ as the exchequer could not afford it this year. He said the government could not do so by printing currency notes.

However‚ the Minister said the government will compensate the government servants by substantially increasing their salaries in the budget 2014-15.

Asad Haroon
A netpreneur, blogger and above all; A Human :) Asad tweets from @aghaasadharoon and can also be approached on Google+

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