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Disparities and Protests

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The people of Pakistan have experienced a strange history of protests and their economical repercussion on individuals and the country as a whole.The protests bring the cities to a standstill, as the angry mobs cause blockade through the streets, roads and main national highways.

The protests are taken out by the political parties, civil society for the human rights or demanding justice for any injustice with any person or any brutal murder and the employees protesting for their salary raise, allowances, structure, bonuses, privatization of govt enterprises and regularization issues.

Even excessive regulation issues irk the employees to adopt the way of protests as such laws and regulation might endanger their jobs.

The protests are also carried out by the families and relatives to mourn the deaths of their near and dear ones who lost their lives in the fake police encounters or forcible disappearance of people demanding their recovery. These include various nationalists,  suspects and other persons.

The protests include traffic jams, hunger strikes, long marches, sit-ins, protest demos. Though, these types of protests are globally held even in developed countries like the US, UK, Germany and the popular Yellow vest movement in France is an example.

Pakistan’s last seven decades are also replete with such protests whenever any elected government failed to deliver or marshal laws that practised authoritarian rule to suppress the dissenting voices or when people felt that their right to freedom of expression is compromised by dictatorial leadership.

The angry mobs take to streets and record their protests in favour of their genuine demands. Such protests have so far been very successful and the government is compelled to bow down before these employees’unions, civil society, and political workers and disperse the protesters after dialogue process because the use of force will further aggravate the situation and turn the scene into a battleground if the situation is mishandled by law enforcement agencies.

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There are several examples of such circumstances in the past that made it very difficult for the governments to deal with such violent protests. The resistance and resilience go hand in hand when both the protesters and the high ups and policymakers show their stubbornness to accept the demands.

This leads to “wheel jams”, “pen down” protest demos and hunger strikes putting governments under immense pressure leaving no other option except the acceptance of their demands to peacefully disperse violent mobs who engulf the executive’soffice and try to cross the Red Zone.

The protests become more extreme when religious parties take to roads against any religious or blasphemy issue.

It is pertinent to mention here that mostly the top bureaucrats consider themselves superior creatures that is because they pass such exam that is branded as Central Superior Services atfederal level and provincial management service  at provincial level .

Their lethargic attitude leads to the protests since employees consider it the last option to put pressure on the top bureaucracy with coverage of media as service tribunals and courts don’t offer any timely relief for such affected employees whose services are either terminated, suspended or dismissed on various reasons. Even high costs of advocates are too heavy for them to afford to fight their case.

If we take the example of the education and health departments, the secretary level bureaucrats feel that they are experts in policy making for these key social sector departments but the fact is that these departments could be run smoothly by the executive officers  from the health and education since they understand the technical terms and needs of the departments more effectively than these civil servants who can only handle office and revenue related  tasks .

It is ironic that there is no quota of gazetted officers from education and health departments to be posted as secretaries, additional secretaries and section officers.

It is disappointing to note that if any Grade 17, 18, 19 and 20 officer is posted at a secretariat in his/her parent department, these top bureaucrats challenge the appointment as ‘non-cadre.’

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It is beyond understanding that despite being the production of teachers, these civil servants consider the teachers incompetent to run the affairs of their own department.

It is sheer injustice to note that when we compare the perks and privileges of both civil servants and other teaching and admin cadre officers, we are astonished to see such huge disparities between their pay packages. Even government confers special allowances and perks upon the employees of  President House, PM house, Senate, National Assembly, Governor House, CM house and Secretariat employee such as utility allowances, pay bonuses, house rent and other privileges which are not provided to any employee serving at divisional, district and tehsil level.

The perks such as time scale, increments are offered to one department while another department is deprived of such perks.

There is no unified or uniform pay package that is causing discontent and sense of deprivation. Our judiciary enjoys high pay packages and they should also pass ruling to bring the pay package in the same stage in lieu of grades to address the anomalies.

It means all gradesirrespective of their departments should make the same salary if the violent protests and pen down strikes are to be avoided.

It is also worthy to mention here that the pay packages of the employees of corporate enterprises such as PIA, OGDCL, SSGC, SNGPL, and PPL etc are five times higher with fringe benefits such as unlimited health facilities, free education and scholarships and overtime facilities that are rare in other departments.

Such high-level disparities warrant that govt should address the variance in the pay packages of government employees, project based positions and corporate employees so that anomalies could be resolved.

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The pay and pension commission should review the situation in the upcoming Annual Budget 2019-2020 to provide relief to those who are deprived of such perks and privileges that are available to other employees.

It is unjust to favour some employees working  in  Federal and Provincial Secretariats i.e President House, PM House, Senate , National Assembly , Governor House , CM House, Provincial Assemblies  Secretariats while deprivingothers who are also governed under the same Civil Servant rules.

The policy of postings, transfers, promotions and regularization must be revised and a quota with ratio of 60:40 should be approved in each department. The promotion cases must be dealt on an annual basis to avoid the disappointment of employees as it affects their output.

The civil services reforms are the need of the hour so that administrative unbalance could be fixed and protests of deprived employees could be averted by providing them with their due right of promotion, confirmation, regularization etc.

I recall the case of some teachers who were appointed through recruitment tests conducted by Professional Testing Services such as NTS, Sindh University, Sukkur IBA and other agencies in a transparent manner by Sindh Government  but after completion of their contract, they are protesting for their confirmation since govt is bound to regulate the services of such teachers.

Is it justified that teachers should protest for their rights on the streets of Karachi while police baton charges them and uses tear gas and water cannons to disperse them?

Finally, it’s pertinent to add that unless the disparities are addressed, the protests will continue. Even the use of force will be counterproductive and may create serious repercussions beyond the control of government.

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Development

The Development of microfinance industry depends upon the resilience and risk management: SECP Chairman Amir Khan

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Islamabad : SECP Chairman, Aamir Khan emphasized that in these challenging times the development of microfinance industry depends upon the resilience and risk management, achieved through quintessential pillars of liquidity-tapped through private capital and technology embracement. Khan was addressing the Non-Bank Microfinance Companies Stakeholders Forum organized by SECP to devise a way forward and collaborate strategic response to cope the challenges posed by COVID-19 pandemic and ensuing lockdowns.

The SECP Chairman Amir Khan, along with Commissioner Specialized Companies Division, Farrukh Sabzwari chaired the session. Representatives of Pakistan Microfinance Network (PMN), State Bank of Pakistan (SBP), National Bank of Pakistan (NBP), Pakistan Poverty Alleviation Fund (PPAF), Pakistan Microfinance Investment Company Limited (PMIC), Karandaaz Pakistan and multilateral donor agencies including the World Bank, International Finance Corporation (IFC) and Department for International Development (DFID) attended the session.

 The Chairman SECP advised NBMFCs to go far product diversification to insurance solutions and saving products and build capacity of their workforce to attain business development and operational efficiency. He endorsed formation of a working group consisting of nominees from SECP, PMN, PMIC and NBMFCs to further analyze the situation. The working group will also take up the matters with relevant forums including ministry of finance, SBP and multilateral donor agencies for possible solutions.

Khan expressed SECP’s firm commitment to providing all possible support to industry not only during the current pandemic times but also in developing the industry on a strong footing. SECP Commissioner, Sabzwari highlighted the measures taken by SECP to provide relief and flexibility to the NBMFCs and their wholesale lender in managing funding requirements. He also talked about SECP’s advice to NBMFCs to defer and reschedule borrower loans.

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Participants acknowledged SECP’s timely intervention to provide regulatory relief to NBMFCs in managing their credit lines and funding requirements. However, industry representatives expressed their concerns on potential defaults by borrower and liquidity crunch that may lead to capital crisis in the industry.

They raised the need of new money injection into the industry through collaborative efforts of microfinance regulators and the government. Representatives of international donor agencies attending the Forum expressed their resolve to extend fullest possible support to Pakistan’s microfinance sector.    

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Development

Gov’t releases Rs 533.33 billion for various development projects so far

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Islamabad: The federal government has so far authorized release of Rs 533.33 billion for various ongoing and new social sector uplift projects under its Public Sector Development Programme (PSDP) 2019-20, as against the total allocation of Rs 701 billion.

Under its development programme, the government has released an amount of Rs 230.3 billion for federal ministries, Rs 175.65 billion for corporations and Rs 43.46 billion for special areas, according to a latest data released by Ministry of Planning, Development and Reform.

Out of these allocations, the government released Rs 38.5 billion for security enhancement in the country for which the government had allocated Rs 53 billion during the year 2019-20.

An amount of Rs 81.37 billion has also been released for the blocks managed by finance division under the government’s 10 years development programme.

Similarly, for Higher Education Commission, the government released an amount of Rs 27.07 billion out of its total allocation of Rs 29 billion while Rs 301.47 million were released for Pakistan Nuclear Energy Authority for which the government had allocated Rs 301.48 million in the development budget.

For National Highway Authority, the government released Rs154.94 billion. Under annual development agenda, the government also released Rs 10.7 billion for Railways Division out of total allocation of Rs16 billion, Rs 7.7 billion for Interior Division, and Rs 8.38 billion for National Health Services, Regulations, and Coordination Division.

Revenue Division received Rs 4.3 billion whereas the Cabinet Division also received Rs 30.18 billion for which an amount of Rs 39.986 billion has been allocated for the year 2019-20.

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The government also released Rs 26.9 billion for Azad Jammu and Kashmir (AJK) block and other projects out of its allocations of Rs 27.26 billion and Rs 16.54 billion for Gilgit Baltistan (Block and other projects).

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Covid-19

Pakistan’s small businesses hit hard by COVID-19

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Small businesses in Pakistan have been adversely affected by the Covid-19 pandemic. The low demand at home, disruptions in supply chains, constraints in international trading, and expected prolonged lockdowns are now leading to severe cash flow problems, the inability to pay back debts and cancellation of orders from clients. 

This rising uncertainty is gradually leading them to lay off employees which will have welfare implications. In some sectors where recovery is difficult to predict, small businesses have started planning for the worst: complete shutdown. This crisis could also imply a much bleaker outcome for the startup ecosystem in Pakistan.  

The government has announced a SME relief package. The central bank has also come forward to relieve some of the funding and finance related concerns of private enterprises. Yet, many micro and small businesses do not understand how to apply or if they are eligible, to receive such assistance. There are others who argue that this one off relief may not be enough given that businesses are going to face depressed demand for a longer term. Pakistan’s past record of small businesses trying to access such fiscal packages is also not encouraging, partly because many such firms do not access formal banking channels for their needs or banks impose steep collateral requirements. Also, large segments of micro enterprises have the entire or some components of their businesses in the informal sector.

Federal and provincial governments have two issues to address now: how to ensure that small businesses are able to access and utilize existing government-provided assistance, and secondly, what more can be done to support private enterprise in these times.

A progressive fiscal policy and commitment to redistributive taxation is in line with the spirit of Riasat-e-Madinah to which Prime Minister Imran Khan often refers to. A sincere effort is required to reduce the burden of compliance costs faced by small firms- often filing returns several times during a year and to multiple tax bodies across the country. 

Dr. Vaqar Ahmed

On the former, it would be best to start by addressing information and outreach gaps. As the problems for businesses are evolving in real-time, hence there remains a need for structured and more frequent public-private dialogue which should be inclusive enough to also give representation to women, youth-led firms and social enterprises. Such a dialogue will also give a sense to the government about how these businesses will get affected in the forthcoming rounds of Covid-19.

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On the latter, I believe the forthcoming budget for the fiscal year 2020-21 should be seen as an opportunity not only to provide support to collapsing businesses but also to put in place economic incentives that encourage enterprises to consider resilient business models. A large part of this has to do with reimagining a better taxation regime.

A progressive fiscal policy and commitment to redistributive taxation is in line with the spirit of Riasat-e-Madinah to which Prime Minister Imran Khan often refers to. A sincere effort is required to reduce the burden of compliance costs faced by small firms – often filing returns several times during a year and to multiple tax bodies across the country. It is an opportunity now to automate, rationalize or eliminate several filing and payment layers in taxation to ultimately help reduce the cost of doing business.

After a lot of persuasion from local think tanks and the International Monetary Fund (IMF), federal and provincial governments agreed to establish a National Tax Council (NTC) to harmonize the general sales tax (GST). 

Currently all provinces have a different structure of GST on services. There are also issues regarding definition of certain activities which the federal government may assume to be under its jurisdiction. Perhaps smaller firms have been the hardest hit due to the fragmented tax structure across the federation and it is time now to expedite NTC’s establishment and work in this direction. Even when the system is finally harmonized, the GST should not be collected by multiple windows at federal and provincial levels. A unified tax return and collection should be made possible through online mechanisms.

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It will also be timely to think about which sectors should be motivated to scale up production and services in the face of this health-related emergency. Hospitals and private clinics operating at micro, small, and medium scale are primary candidates for cut in GST on services and even rationalization in direct tax rates. Firms producing personal protective equipment should also see a relief in taxes. The trade taxes faced by such producers or even hospitals importing from abroad need to be revisited. The agro-based and food processing enterprises will need similar help as their input supplies face price and supply volatilities.

Covid-19 also increased demand on several other sectors providing essential services. Our policy circles have rarely seen these sectors as important for the social and mental wellbeing of society until the pandemic struck. It will now be timely to recognize the services of firms (including schools) providing online services. The economic policy managers must think out of the box how best to leverage e-commerce in the battle against Covid-19. 

– Dr. Vaqar Ahmed is an economist and former civil servant. He is author of ‘Pakistan’s Agenda for Economic Reforms’ published by the Oxford University Press. Twitter: @vaqarahmed

Courtesy : ArabNews

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