Thread by @umar8528

PHC suspended KP's extension in govt employees' age act. This act was approved by the KP cabinet and then passed by the KP assembly.

This thread would cover the rationality and advantages of increasing Govt's employees' age.

Here you go.

If a govt spends more public funds on salaries and pensions, the less the govt would be able to spend on development projects.

During the last 10 years, salary and pensions as a proportion of the KP government increased by almost 4 times.

While the Revenue has grown by 9.5% in the last 5 years, expenses have grown by 12%; with salaries & Pensions increasing by 10%& 21% in the same period, resulting in shrinking fiscal space.

The increase in salary and pensions Vs shrinking provincial development budget (2nd Pic)

In 2019-20 KP govt took several steps to increase provincial development budget some of them are:

-Retirement and early retirement age reform
-Better control of budgeting and government expenditure
-Focus on generating revenue

This helped Govt to increase dev budget by 29 bn

This would translate to:

-More teachers can be hired
-More schools and hospitals can be refurbished
-More pro-poor initiatives (basic urban and rural development, drinking water provision, sanitation) can be planned and executed
-More jobs can be created.

The retirement age reform alone saves approximately Rs. 54 bln in the next 3 years, Rs. 138 bln over the next decade, and Rs. 12 bln per year in perpetuity.

Compulsory retirement is at 63 rather than 60. People at 60 can continue to voluntarily retire

Previous rules on early retirement allowed a 45-year old person at the peak of their professional life, to retire, claim a full pension and commutation, and a private sector salary. Is that fair?

The retirement age reform changes that and saves that money.

The retirement age reform does not affect the general public, remember that only 8% of our labor force work in the public sector, 92% do not work in government.

Retirement age across the world is above 60 and increasing.

Increase in retirement age in Pakistan is not unprecedented and has increased from 55 to 60 between 1960 & 1967, given changes life expectancy in the country

Contrary to the claims of less job creation, govt has budgeted more than 45k posts (Pic-1) both across settled and Merged Areas. This is more than the average over the last few years, which is 15k-20k.

Reversing this decision will have critical consequences.