A recent study titled “Lifetime Cost of Public Services” by the Pakistan Institute of Development Economics (PIDE) has shed light on substantial disparities in salaries, benefits, and operating expenses among employees in different grades, ranging from 17 to 22. According to the research, commissioned under the banner of “Lifecycle Cost of Public Services,” conducted by the Pakistan Institute of Development Economics (PIDE), employees in Grade 22 receive 32.52 times higher salaries, benefits, and operating expenses than those in Grade 1.
The research underscores significant inequalities in salaries and benefits between the highest and lowest grades. The disparities in salaries, benefits, and operating expenses highlight a stark lack of equity. According to the Pakistan Bureau of Statistics, as of December 2022, Pakistan has a total of 1,374,911 federal government employees, including civilians, armed forces personnel, and autonomous/corporate bodies.
The government invests a substantial amount in the salaries and pensions of its employees. Approximately 30 billion rupees are spent on the salaries and nearly 15 billion rupees on pensions. Additionally, project workers, individuals working in government corporations, and other organizations cost the government around 20 billion rupees. The total expenditure on the military’s salaries and allowances amounts to nearly 10 billion rupees.
The disparity in salaries increases proportionally with higher grades, leading to significant disparities in cash allowances and total costs. Government-provided amenities, seen as a form of benefit, have never been quantified, and the government has never accounted for their best alternative use (opportunity cost). For officers in Grades 20-22, the use of government vehicles for personal purposes increases the basic salary by 1.2 times. The inefficient performance of medical allowances and medical bills leads to an additional cost of 2.5 to 3 billion rupees in medical bills.
Allowances and various perks significantly contribute to the overall cost of government employees. Therefore, if income is generated, it would alleviate the burden of lower salaries in government sectors. The research estimates that a Grade 1 employee hired in July 2023 will cost the government between 8 million and 27 million Pakistani rupees, inclusive of salaries, pensions, benefits, and operating costs.
This analysis raises a critical question: does Pakistan possess adequate resources to sustain these commitments over the next 30 years? If not, it is an opportune moment to pause and evaluate the repercussions of adding new workers to the system. The government must consider the long-term financial implications of creating new employment opportunities and strike a balance between short-term benefits and sustainable fiscal policies.
The study, initiated by the Pakistan Institute of Development Economics (PIDE), emphasizes the need for meticulous long-term financial planning to avoid jeopardizing the country’s financial stability while meeting the demands of a growing workforce.
