By Staff Reporter
ISLAMABAD: Pakistan will slash pay for employees of state-owned enterprises and government-backed autonomous institutions by 5% to 30%, directing every rupee saved into public relief programs as the country grapples with soaring fuel costs from the US-Israel war on Iran.
The decision, reached on Saturday in a high-level review chaired by Prime Minister Shehbaz Sharif, extends austerity measures the government announced just days earlier and comes as global oil markets reel from the closure of the Strait of Hormuz. The conflict, which erupted two weeks ago, has already forced a Rs55-a-litre increase in petrol and high-speed diesel prices last week, with the prime minister opting Friday to freeze domestic pump prices despite a fresh rise in international benchmarks.
A statement from the Prime Minister’s Office said the salary reductions for SOE and autonomous-institution staff mirror those already imposed on federal government employees. “The funds saved as a result of all austerity measures would be used only for public relief,” it added.
The Saturday meeting reviewed the impact of higher petroleum-product prices and the rollout of earlier belt-tightening steps. Attendees included Finance Minister Muhammad Aurangzeb, Petroleum Minister Ali Pervaiz Malik, Information Minister Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani and Federal Board of Revenue Chairman Rashid Mahmood Langrial, along with other senior officials.
Several previously announced initiatives were reaffirmed or refined in the meeting. It reaffirmed that the four-day work week would not apply to law-enforcement agencies or the Federal Board of Revenue, both of which would continue normal operations. It also confirmed that a third-party audit would be carried out over the next two months to verify the grounding of 60% of government vehicles across all departments and a 50% reduction in their fuel allocations.
The outright ban on the purchase of new vehicles and all other government procurement remains fully in force. Cabinet members, ministers, advisers and special assistants to the prime minister will forgo their salaries for the next two months, with those amounts redirected to public welfare. Foreign travel by ministers, ministers of state, special assistants and all government officers has been banned outright, with teleconferencing and online meetings to be prioritised instead; the prime minister was quoted in the statement as saying the “complete ban … will remain in place.”
Government representatives on the boards of corporations and other institutions will no longer receive any participation fees, and those sums will be counted toward overall savings. Sharif also directed all Pakistani embassies worldwide to observe Pakistan Day celebrations on March 23 with the utmost simplicity. The statement said the prime minister instructed concerned secretaries to implement and monitor every austerity measure, submitting daily progress reports to a review committee.
The latest steps build directly on the package of austerity and savings initiatives Sharif announced on Monday to shield the economy from the global oil shock. With the Strait of Hormuz closed, international crude prices have spiked sharply, transmitting immediate pain to import-dependent Pakistan where fuel costs underpin transport, power generation and everyday prices. All proceeds from the salary cuts, vehicle restrictions, travel bans and other economies will flow exclusively to public relief, the government emphasised.
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