PESHAWAR: Three major universities of Khyber Pakhtunkhwa located in the greater campus in Peshawar have not paid retirement benefits amounting to Rs1.67 billion to their retired employees the for past several years owing to the financial crisis, according to sources.

The greater campus comprises the University of Peshawar (UoP), the University of Agriculture and the University and Engineering and Technology (UET).

Sources told Dawn that UoP, the largest and oldest university in the province, owed Rs1.1 billion to its retired employees. Similarly, the University of Agriculture has to pay Rs500 million to its former employees while UET owes Rs61 million to its retired workers.

A senior official at the agricultural university told Dawn that since 2020, they had not paid retirement benefits to employees owing to the financial crisis. The benefits, which have not been paid to the employees, include LPR encashment and commutation.

Federal govt has decreased grants of UoP, Agricultural University and UET

He said that many of the retiring employees were opting for monthly salary in pension instead of commutation.

As per the rules, if employees don’t opt for commutation and other benefits on their retirement, then the government pays them almost the whole salary with minor deductions of a few allowances till their death.

Since the retired employees get full salary as pension, the pension budget of the universities is increasing with each passing year.

The official said that cash-starved Agriculture University was unable to release salaries for May to its employees timely rather issued the same on June 14 when the provincial government extended financial support to it.

Similarly, he said, both UoP and the University of Agriculture had no funds to pay salaries to their employees for June.

“The universities of the greater campus (old universities) are facing a severe financial crunch/budgetary shortfall affecting timely payment of salaries and pensions,” says an official document shared by the universities with the provincial government.

According to the documents, the major reason for the budgetary shortfall is a decrease in the federal government grants, which it pays to universities through the Higher Education Commission.

The documents state that annual grants given by the federal government used to increase by about an average of 10 per cent every year. However, it has steadily declined in the previous years despite rising operational costs like salaries and pensions.

The universities’ own fund enhancement efforts cannot match the increasing costs.

The official document reveals that a 27 per cent decline has been witnessed in the fund provided by the federal government to UoP. It states that Rs2 billion were given to the university in 2020-21, which was reduced to Rs1.49bn in 2021-22, Rs 1.48bn in 2022-23 and Rs1.45bn in 2023-24.

Similarly, the University of Agriculture Peshawar has also faced around a 28pc cut in the funds issued by the federal government during the last four years. It states that Rs1.2bn fund was provided by the federal government in 2020-21, which was constantly on the decline in the following years as it was reduced to Rs10.3bn in 2021-22, Rs0.95bn in 2022-23 and Rs0.933bn in 2023-24.

The federal government has also slashed the 23pc budget of UET Peshawar during the last four years from Rs1.18bn in 2020-21 to Rs0.9bn in 2023-24.

Despite the remarkable cut in the budget for UoP, the salaries of its employees have been increased by 63pc and pensions by 72pc. The salaries of the Agricultural University’s employees have been increased by 41pc and their pension by 67pc, while the pension budget of UET has been increased by 72pc and salaries by 38pc.

It is pertinent to mention here that prior to presenting the federal budget in the National Assembly, the federal government denied the allocation of the budget to universities in the country. However, the federal government withdrew its decision after criticism from people and employees.

Published in Dawn, June 24th, 2024