An exorbitant parting gift

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In the run up to the elections

In what is surely going to attract legitimate criticism and accusations of ‘pre-poll rigging’ Prime Minister Shahid Khaqan Abbasi has approved an additional salary for all federal employees equivalent to three months basic pay costing an estimated Rs25-30 billion of taxpayer money. This happens to be a first of its kind benefit being given to government employees indiscriminately across the board.

That the rare bonus has been approved for federal employees only will certainly not go down well with other government functionaries not to mention the armed forces who will be looking for the same benefit to be extended to them. If that were to be demanded the total sum would be in excess of Rs150 billion.The move is reminiscent of his boss Nawaz Sharif’s style of governance during his early days as third time Prime Minister where he would move crucial legislation on fiscal and budgetary matters without taking the federal cabinet into confidence. The Supreme Court had to subsequently instruct him through a ruling that he could not continue to do so as it was a “usurpation of power”.

At a time when the country is facing a fiscal deficit crisis with the figure expected to reach 5.5% of GDP this financial year owing to falling exports and abysmal tax collection rates this unnecessary expenditure is rather shameful.The current government has only a little more than a week to go and is entering this election cycle under immense pressure and mounting uncertainty. A scurry of such allocations are hence being made to please party loyalists both in the parliament and bureaucracy before the interim government takes over in the hopes of gaining their support during and after the elections.

Perhaps the PM also feels that another few billions on the expense side at the cost of some additional criticism from the opposition parties is a small price to pay especially given the likelihood that his party might not be coming back to power and as a result the deficit would be someone else’s headache. Nonetheless it is just another example of imprudent fiscal decisions that has become somewhat a hallmark of this party’s five years in power.