KP Government Considers Salary Cuts Amid Financial Crisis

Sources report a high-level meeting where the dire financial crisis confronting the Khyber Pakhtunkhwa government was assessed, and various strategies were examined to manage it.

Muhammad Faheem

Amid a pressing financial crisis, the Khyber Pakhtunkhwa (KP) government is contemplating salary reductions for its employees, an increase that was planned for this fiscal year. Sources indicate that a recommended 25 percent cut in government employees' salaries awaits approval from the Chief Minister and the caretaker cabinet.

The KP government has assembled recommendations aimed at imposing a financial emergency and reducing government employees' salaries by 25 percent. This proposed action is intended to avert a financial default. The proposal is currently pending approval by the caretaker Chief Minister, with no significant progress reported.

The Finance Department sources report a high-level meeting where the dire financial crisis confronting the Khyber Pakhtunkhwa government was assessed, and various strategies were examined to manage it.

Within the meeting, suggestions were put forth to rescue the province from potential default. Three options were outlined to address the financial crisis. The first entails retracting the 35% salary increase for government employees in the current fiscal year, resulting in monthly savings of 9 billion rupees.

The second option involves a 25 percent reduction in government employees' salaries, potentially saving 8 billion rupees per month. The third option contemplates the abolition of executive allowance, health professional allowance, and other allowances provided to government employees, which could save over 2 billion rupees per month, according to initial estimates.

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Senior journalist Mushtaq Yousafzai has noted that a carefully orchestrated formula has pushed the province into this financial crisis. Despite the availability of federal funds, they are not being disbursed to the province. Yousafzai attributes part of the problem to the lack of advocacy by key provincial figures, the caretaker Chief Minister, and Chief Secretary. This marks the first instance in the province's history where the provincial government is struggling to pay its employees, reflecting a lack of concern for the province's condition by its responsible leadership.

In response to the financial crisis, the Khyber Pakhtunkhwa government is considering hiring Class IV employees on a daily wage basis. An assessment is underway to determine the process and necessity of shifting from permanent to daily wage recruitment for Class IV employees across the province.

Class IV employees, however, have strongly voiced their opposition to this proposition, demanding that officers, not the lowest-paid workers, be hired on a daily wage basis to address the financial crisis.

The Establishment Department sources reveal that a substantial number of Class IV employees are currently hired throughout the province. The cost of salaries and pensions for those permanently employed is straining the provincial treasury. With this in mind, the possibility of hiring Class IV employees on a daily wage basis, as opposed to permanently, is under consideration. However, no final decision has been reached on this matter. Work on this issue has begun, and a resolution is expected soon.

Khalid Javed, General Secretary of the Class IV Association Khyber Pakhtunkhwa, rejected this suggestion, emphasizing that Class Four employees should not be held responsible for the province's financial challenges. To genuinely act in the province's interest, he asserts that the Chief Secretary and all officers should be paid on a daily wage basis, which could annually save billions of rupees for the government exchequer. Depriving Class IV employees of their basic rights under the guise of reforms is likened to the genocide of these workers.