ISLAMABAD: Two key government allies, the PPP and Balochistan Awami Party, on Friday expressed reservations about the Rs14 trillion budget for the financial year 2023-24 for their own, separate reasons.

During the cabinet meeting held before the budget session, the PPP insisted on a 50 per cent increase in the salaries of government employees while BAP demanded more funds for the development of Balochistan province.

The PPP also rejected a 30pc hike in the salaries of government employees and demanded that they should be increased by 50pc and pensions by 25pc.

“The PPP leaders insisted that at least pays of the government employees and pensions should be increased by 50 and 25 per cent respectively,” insiders said. Later, the finance minister apprised the cabinet members about each and every aspect of the budget in detail, convincing the PPP leadership.

Prime Minister Shehbaz Sharif, however, managed to convince the PPP to agree on a 30pc raise in the salaries whereas a committee was formed to alleviate BAP’s concerns. Subsequently, the BAP ended its boycott.

PM forms body to address province’s reservations, convince PPP over 30pc pay hike

According to the Prime Minister’s Office (PMO), the PM formed a committee to address the reservations of the BAP regarding the development projects and issues faced by the Balochistan province.

The PM made this decision in a meeting with a BAP delegation and tasked the committee to hold detailed consultations and present a report within a week.

According to the budget document, Balochistan got the smallest share in the development budget, as a meagre sum of Rs479 billion was allocated to the province. Punjab was allocated Rs2.6 trillion followed by Sindh at Rs1.3 trillion, and Khyber Pakhtunkhwa at Rs866 billion.

“Without political stability, even billions or trillion rupees budget could not make a difference in improving the economic situation,” the prime minister said while addressing the federal cabinet meeting. “Amid current inflation and price hike in international markets, salaries have been reduced by 50 per cent. So it is our responsibility to make a significant increase in the salaries of the working class,” he added.

Accepted IMF terms

According to the prime minister, the government has accepted the requirements of the International Monetary Fund (IMF) and hoped that a staff-level agreement would be reached in the near future to pave the way for the revival of the programme.

The PM expressed hope that the staff-level agreement with the International Monetary Fund (IMF) will be made by the end of the current month. “I have talked to the IMF officials for an hour in which both sides agreed to ink the agreement within this month,” he added.

After coming to power 14 months ago, the premier added the government had to deal with the challenges of the IMF, the post-flood situation, as well as global inflation.

He, however, expre­ssed satisfaction that the current deficit in 10 months was reduced to $3.3 billion and hoped that the agriculture sector would witness a boost as well.

Mr Sharif said the government was also considering reducing gas and electricity tariffs. The prime minister also appointed Rohail Sheikh as his adviser.

During the meeting, the PM also expressed gratitude to friendly countries, particularly China, Saudi Arabia, and United Arab Emirates (UAE) for financially supporting Pakistan in the current economic crisis.

This is the second budget being presented by the coalition government under the banner of the Pakistan Democratic Movement (PDM). The government in the Pakistan Economic Survey highlighted its significant economic gains in terms of improved external and fiscal indicators.

Even with a significant increase in debt servicing, the fiscal deficit reduced to 4.6pc of the gross domestic product (GDP) in July-April FY 2022-23 against 4.9pc for the same period last year, while the primary balance reverted from deficit to surplus.

PM-BAP meeting

Earlier in the day, a delegation of BAP comprising Senate Chairman Muha­mmad Sadiq Sanjrani, leaders Mir Khalid Khan Magsi and Naseebullah Bazai met the prime minister before the budget session and informed him about the financial issues of the province.

The meeting resulted in the formation of a high-level committee as well as issuing of an order for immediate payment of due pending against Pakistan Petroleum Limited (PPL). The Balochistan chief minister had directed the MNAs of his party to boycott the budget session of the assembly on Friday as a protest against the attitude of the federal government towards resolving the financial crisis and other issues faced by Balochistan. After the formation of the high-level body, the BAP ended its protest.

The committee will hold its meeting on Monday and the recommendations of the committee will be included in the federal budget. Balochistan Chief Minister Quddus Bizenjo expressed satisfaction and hoped that the PM would fulfill his promise. “We will send a detailed letter to the prime minister regarding the position and issues today,” it was said.

Saleem Shahid in Quetta also contributed to this report

Published in Dawn, June 10th, 2023