KP mulls 25% cut in salaries of govt employees to prevent default

PESHAWAR: The Khyber Pakhtunkhwa (KP) government has prepared a set of recommendations to impose a financial emergency in the province and slash 25% in salaries of government employees to overcome financial crisis and prevent default.

In this regard, a high-level meeting was held in the KP Finance Department to assess the dire financial situation and explore various options to control it, credible sources told HUM News English.

According to the sources, several recommendations were discussed during the meeting, with a focus on addressing the financial crisis facing the province. The proposals will be presented to the caretaker chief minister for approval shortly, the sources said.

One of the options discussed in the meeting involves a rollback of the 35% salary increase given to government employees in the current fiscal year. This rollback would result in monthly savings of around Rs9 billion to the province.

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Another option under consideration is a 25% reduction in government employees’ salaries, which will potentially save approximately Rs8 billion each month.

The provincial government is in a tight spot amid the ongoing financial crisis. They are actively exploring the possibility of reducing salaries to alleviate the situation, the sources said.

The third option on the table involves discontinuing executive allowance, health professional allowance and other similar perks for government employees, which will lead to monthly savings of approximately Rs2 billion.

It has also been suggested that strict financial discipline will be enforced in provincial government-run MTIs (medical teaching institutions) to manage financial stability.