PIDE critical of expanding govt size
Business
Says politicians are offering jobs instead of creating the same
ISLAMABAD (Web Desk) – Criticising the size of state machinery, the Pakistan Institute of Development Economics (PIDE) says the number of federal government employees has been increasing steadily over the past few years.
In a latest report ‘Life Time Cost of Public Servants', PIDE cites expansion of the government’s bureaucracy, the increasing number of government-run social programmes, political appointments, poor HR planning and bad recruitment as the factors.
“According to the Pakistan Bureau of Statistics, the latest headcount of federal government employees in Pakistan is 1,374,911 as of December 2022. This number includes civilians, armed forces and autonomous/semi-autonomous/corporations.”
It says, “When a new government employee is recruited, the public sector incurs costs associated with their salary, benefits, and potential training. These financial outlays are funded through tax revenue. The addition of a new employee increases the overall personnel expenses of the government, contributing to a larger portion of the budget being allocated to salaries and benefits. This can directly affect taxpayers, as the government may need to raise revenue through increased taxes or reallocation of funds from other areas to cover these expenses.”
The report is extremely critical of the political leadership.
“PIDE’s current study has investigated the burden that each newly recruited individual (ranging from Grade 1-22) brings on the national budget. However, politicians raise political slogans of offering public employment to substantial number of individuals, without acknowledging that government’s job is to create new opportunities and not offering jobs. However, politicians by providing employment opportunities to many individuals, especially within their own party or patronage network, politicians can cultivate a base of supporters who are more likely to vote for them in elections.”
“The employment practices of political governments in developing economies often stem from a combination of political motivations, short-term focus, lack of economic expertise, and societal expectations. While immediate job creation can have positive effects, it is crucial for governments to also consider the long-term financial implications and strike a balance between short-term gains and sustainable fiscal policies.”
DISPARITY
The report also says that the combined ratio of salaries, perks and operating expenses is much higher for upper grades from 17 to 22 when compared to lower ones.
“The combined ratio of salaries, perks, and operating expenses is much higher for BPS-22 employees getting 32.52 times from BPS-1 employee. This suggests that perks and benefits and operating expenditure are highly compressed, with a large gap between the highest and the lowest salaries.”
