Proposal to raise govt employees' retirement age dropped
1. Sources say possibility of increasing age limit to 62 or 63 for civilian employees, others had diminished so far
The proposal to increase the retirement age of government employees in Pakistan has been shelved due to strong opposition from influential stakeholders. This decision affects all public sector employees, including those in civil and military roles, as well as the judiciary. The proposal's implementation has been postponed indefinitely, pending further analysis and preparation.
In the meantime, the Pakistani government is moving forward with plans to phase out ministries related to devolved subjects and is considering asking provinces to contribute to social protection initiatives like the Benazir Income Support Programme (BISP). The budgetary allocation for the Higher Education Commission (HEC) is also under review as part of a broader effort to rationalize government spending. A high-powered committee led by Finance Minister Mohammad Aurangzeb is expected to finalize its recommendations by late July or early August, with potential announcements around August 14.
Despite abandoning the age limit increase, other pension reform proposals remain under consideration, including potentially abolishing the provision for paying pensions across generations. On May 7, 2024, three federal ministers outlined a plan to overhaul the pension system, which included raising the retirement age for all public servants. Law Minister Azam Nazeer Tarar stated that implementing these reforms would require changes to relevant laws and constitutional amendments.
In his recent budget speech, the finance minister announced a reduction in the development budget by Rs250 billion, lowering the Public Sector Development Programme (PSDP) from Rs1,400 billion to Rs1,150 billion, while increasing the PPP model's share from Rs100 billion to Rs350 billion. The effectiveness of the PPP Authority remains in question, as it has yet to execute significant projects.
The government has also sought approval from the International Monetary Fund (IMF) to make changes to the proposed finance bill for 2024-25, including reinstating a fixed tax regime for exporters and providing relief on hybrid vehicles, stationery, charitable organizations, and possibly reversing the tax increase for professors and researchers. Secretary Finance Imdad Ullah Bosal did not respond to inquiries about these proposals at the time of reporting.
