The government on Wednesday flatly ruled out further increase in pension and salaries of civil servants by making an excuse of shortage of financial resources, and saying maximum possible relief has already been provided to them in the budget.

Secretary Finance Dr Waqar Masood said that government has given maximum relief to the civil servants in the budget by merging two-adhoc allowance into basic salaries and increase the pays by 7.5 percent in the budget.

The merger has the financial impact of Rs 6.4 billion on the budget, which is equal to 2 percent increase in their salary, he added.

The Senate Standing Committee on Finance, which was chaired by Senator Saleem Mandviwalla to consider committee members recommendations on Finance Bill, recommended 20 percent increase in pay and pension of government employees. “It is demand of the every party to give further increase on salaries and pensions. Otherwise, it would create problems for you in the National Assembly in passing the Finance Bill”, Saleem Mandviwalla asked the Secretary Finance.

The Senate committee also recommended the government to eliminate the petroleum levy and reducing the sale tax on gas, electricity and petroleum produces to provide relief to the people. Secretary Finance opposed the proposal, stating that levy has already been reduced and it cannot be further reduced.

“Inflation would go up but due to expected increase in prices in the international market”, Dr Waqar admitted in reply to a question regarding taxation impact on inflation. He said that inflation at present is at lowest level of 11 years.

Federal Minister for Planning and Development Ahsan Iqbal opposed the committee’s suggestion to present the budget at least three months before the approval for discussion in the parliament. He said that every government comes into power with the vote of the masses and with a manifesto and prepares budget for implementation of its manifesto. However, he agreed to hold consultative meetings on budget with stakeholders to incorporate their recommendations.

Earlier, an official of the petroleum ministry told the committee that the government has started negotiation with Chinese company for financing of 700-kilometer pipelines from Gwadar to Nawabshah for IP gas pipeline project and LNG terminal would also be constructed in Gwadar.

He said that work on pipeline on Iranian side of the project could not be undertaken due to international sanctions on Tehran. He added that sanctions are on banking sector that creates problems in opening of Letter of Credit (LC).

Secretary Planning said that work of Rs 23 billion Gwadar airport would be started in the next fiscal year with Chinese assistance and land for this purpose has already been purchased by the provincial government.

Minister for Planning and Development Ahsan Iqbal said that the performance of social sector has been declined after the devolution of the ministries from federal government to provinces under 18th Constitutional Amendment. He said that there is need to constitute an inter-ministerial committee for solution of missing links of devolution. Senators stated that the chairman Senate has already formed a committee of the Senator to resolve the issues emerged after devolution.

The Senate committee recommended the National Assembly for the withdrawal of GST on fertilizers namely Urea, DAP, NPK, Potash (SOP) and Zink which has eroded farm profitability and as such adversely affected the farming community in Pakistan. Similarly, it has also asked for withdrawal of GST imposed on pesticides and herbicides/ weedicides which has resultantly increased the cost of production of various crops and affected the farming community in Pakistan. Chairman Federal Board of Revenue Tariq Bajwa informed the committee that revenue estimates of these two proposals are Rs 43.5 billion.

The Senate’s committee also recommends to the National Assembly that all poultry plant, equipment and machinery should be exempted from the sales tax.