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Business Recorder
4 days ago
- Business
- Business Recorder
Federal govt notifies grant of compensatory allowance
ISLAMABAD: The government on Friday notified grant of compensatory allowance for federal government employees. Finance Division issued an office memorandum which stated that federal government has granted Disparity Reduction Allowance (DRA-2025) at the rate of 30 percent of the running basic pay as on 30-06-2022 to those offices which are already in receipt of that allowance. DRA is accounted for the calculations of compensatory allowance to federal government employees who are serving on deputation basis as per terms and conditions prescribed in Finance Division's OMNoF.3(14)R-3/2009-477, dated 29-11-2023, i.e. the amount of DRA will be reduced from the amount of Compensatory Allowance. It is requested that offices which are in receipt of DRA and they have officers who are drawing Compensatory Allowance on 1st July, 2025, the amount of Compensatory Allowance of those officers may be reduced by the amount of DRA-2025 at the rate of 30 per cent w.e.f. 1st July, 2025. Ministries/Divisions are requested to circulate these instructions to departments/autonomous/semi-autonomous/corporate bodies etc under their administrative control, for compliance. The copy of this OM is being endorsed to Controller General of Accounts and AGPR for implementation of this decision,' the memorandum noted. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
Rs50bn extra subsidies to power consumers: Planning ministry defies ECC decision
ISLAMABAD: The Ministry of Planning, Development and Special Initiatives has reportedly declined to comply with the Economic Coordination Committee's decision to allocate Rs50 billion in additional subsidies to power consumers over a three-month period, well-informed sources told Business Recorder. According to sources, the Planning Ministry has referred to a letter from the Finance Division dated May 16, 2025, and an Office Memorandum (OM) from the Power Division dated June 5, 2025, regarding the ECC's May 5, 2025 decision on 'tariff rationalization for the power sector – waiver of rebasing for up to 200 units.' The Planning Ministry argues that, under the Public Finance Management (PFM) Act 2019, funds under the Public Sector Development Program (PSDP) are to be allocated and released solely for duly approved development projects. The Ministry pointed out that the Federal Cabinet had approved the Rs50 billion reallocation from the PSDP during its meeting on July 8, 2024, based on a summary from the Power Division. However, the Finance Division subsequently revised the PSDP 2024–25 allocation downward—from Rs1,400 billion to Rs1,100 billion—via an Office Memorandum issued on July 26, 2024. As a result, ministries and divisions collectively surrendered Rs300 billion to absorb the reduction. Ministry seeks Rs1.6trn PSDP: FY26 budget on June 2 The Planning Ministry has stated that, in light of this overall reduction, it cannot surrender an additional Rs50 billion at this stage. However, it has no objection if the Finance Division reallocates the required funds from the Rs300 billion already surrendered by other ministries under PSDP 2024–25. It has advised the Power Division to approach the Finance Division accordingly. Official documents reveal that the ECC, on May 5, 2025, had directed the Planning Ministry to surrender Rs50 billion from the PSDP to the Power Division as part of the government's commitment to meet circular debt (CD) targets agreed with the International Monetary Fund (IMF). The Power Division had earlier informed the ECC that the Prime Minister's Office, on May 13, 2024, instructed it to finalize a plan for off-grid energy solutions, including the solarization of tube wells in Balochistan, for the FY 2024–25 budget. Subsequently, consultative meetings were held under the chairmanship of the Minister for Power and the Chief Minister of Balochistan. The sessions were attended by the Ministers for Commerce and State for Power, provincial ministers, secretaries, and energy experts. The recommendations from these meetings were presented to the Prime Minister on February 2, 2024. It was agreed to solarize approximately 27,000 agricultural tube wells, each eligible for compensation of up to Rs2 million, contingent upon disconnection from the national grid. The cost—estimated at Rs55 billion—would be shared between the federal government (70%) and the Balochistan government (30%). A detailed agreement, including implementation mechanisms via Standard Operating Procedures and a Steering Committee, was signed on July 8, 2024, by the Power Division Secretary and the Chief Secretary of Balochistan. The Cabinet gave formal approval on July 31, 2024. So far, Rs14 billion has been released via a Technical Supplementary Grant (TSG) from the National Food Security and Research Division's budget under the Prime Minister's National Programme for Solarization of Agricultural Tube Wells. The Power Division informed the ECC that the remaining Rs24.5 billion would need to be provided from the Rs50 billion additional subsidy allocation proposed by the Finance Division. It emphasized that, in order to meet the revised CD flow target of Rs337 billion by June 2025, it must utilize the entire Rs1.229 trillion subsidy allocated for the power sector. The Cabinet's July 8, 2024, approval to reallocate Rs50 billion from the PSDP to fund tariff differential subsidies is part of this subsidy allocation. While the Power Division agreed to allocate funds from its existing budget in the short term, it requested that any shortfall be reimbursed in June 2025 to meet IMF-agreed CD targets. To address the issue, the Power Division submitted two proposals: (i) Finance Division should surrender Rs50 billion from PSDP to the power subsidy lump provision in Demand No. 45, as per the Cabinet's July 8, 2024 approval; and (ii) a Technical Supplementary Grant of Rs24.5 billion should be transferred from Demand No. 45 of the Finance Division to Demand No. 33 of the Power Division, for the implementation of the solarization project in Balochistan. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
Ad hoc relief: Ministries/Divisions yet to submit list of ‘beneficiaries'
ISLAMABAD: A number of ministries/Divisions have yet to provide list of autonomous/semi-autonomous bodies and corporations, etc under their administrative control, along with details of their pay structure and whether they have sought concurrence of Finance Division for grant of ad hoc and other allowances. This was revealed in official document of the Finance Division. The division notified grant of ad hoc relief allowance-2025 to the executive/supervisory staff of autonomous/semi-autonomous bodies, corporations etc. Federal govt employees: MoF notifies 10pc ad hoc relief, 30pc DRA The notification stated that consequent upon grant of Adhoc Relief Allowance-2025 @ 10 percent of running basic pay to the civil servants w.e.f. 01-07-2025 vide Finance Division's OM No F.1(1)Imp/2025 dated 04-07-2025 , it has, inter-alia, been decided that the grant of adhoc relief allowance-2025 subject to existing conditions will also be applicable to the employees of autonomous/semi-autonomous bodies and corporations, which have adopted the federal government's basic pay scales scheme in totality. The above orders will, however, not be applicable to those public sector corporations and autonomous/semi-autonomous bodies which have adopted different pay scales/allowances. In case of such organisations, the grant of Ad hoc Relief Allowance-2025 @ 10 per cent of basic pay subject to existing conditions will be allowed with the concurrence of Standing Committee of Finance Division on the recommendations of the respective Board of Directors/Governors. The grant of Ad hoc Relief Allowance 2025 will invariably be tagged with the financial position of the organisation. It is also clarified that Autonomous/Semi-Autonomous Bodies and Corporations, etc will forward the cases of executive/supervisory staff (only) with the recommendations of their respective boards for concurrence of Finance Division to the grant of Ad hoc relief Allowance-2025 @ 10 per cent of basic pay subject to existing conditions w.e.f. 01-07-2025 and subsequently, on the same analogy, this benefit will be allowed to the non–executive/nonsupervisory staff of the autonomous/semi-autonomous bodies and corporations with the approval of their board of director/governors. Furthermore, it is pertinent to point out that paragraph (h) of sub-rule (1) of rule 12 of the Rules of Business, 1973, provides that no division shall without previous consultation with the Finance Division, authorise the issue of any orders which will involve a change in the terms and conditions of service of government servants, on their statutory rights and privileges, which have financial implications. In addition to above, the Supreme Court of Pakistan in its judgment in Civil Appeals No1428 to 1436 of 2016 concluded that 'The Rules of Business, 1973 are binding on the Government and a failure to follow them would lead to an order lacking any legal validity.' In view of this position, it is binding upon all the administrative ministries/divisions of semi-autonomous, autonomous bodies/corporations to ensure that any changes in the pay, allowances and privileges of executive/supervisory staff of the semiautonomous, autonomous bodies/corporations working under their administrative control, are processed in accordance with the Finance Division's OM NoF.1(1)Imp/94, dated 26-6-1999. In the last financial year, all ministries/divisions were requested to provide a list of autonomous/semi-autonomous bodies and corporations, etc under their administrative control, along with details of their pay structure and whether they have sought concurrence of Finance Division for grant of ad hoc and other allowances, and their pay scales on the given format but the requisite information is still awaited from a number of ministries/divisions. In case the approval has not been sought, the case should be initiated and forwarded for consideration of the Standing Committee of Finance Division, and final approval by the secretary Finance Division. All ministries/divisions were requested to comply with these instructions and submit a report by 30-07-2025, and convey these instructions to autonomous/semi-autonomous bodies and corporations under their administrative control for taking further necessary action within the current fiscal year 2025-26. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
PSO exchange rate adjustment led to HSD price hike
ISLAMABAD: High-speed diesel (HSD) prices have risen by Rs11.37 per litre for July 16-31, 2025 fortnight. This increase is largely attributed to an exchange rate adjustment granted to Pakistan State Oil (PSO) while petroleum levy (PL) and climate support levy (CSL) have been kept unchanged. According to the documents, PSO exchange rate adjustment accounts for approximately Rs6.90 per litre of this hike, which constitutes about 60 percent of the total increase. Fuel prices likely to increase Other factors which attributed to price hike are the Inland Freight Equalization Margin (IFEM) on HSD which has also jumped to Rs6.04 per litre, a significant increase from Rs2.09 per litre in the previous fortnight. The ex-refinery price of HSD has climbed by Rs7.5 per litre, moving from Rs177.24 to Rs184.79 per litre. For petrol, several adjustments have led to price increases. Pakistan State Oil (PSO) exchange rate is set at Rs1.22 per litre, while the average Platts with incidentals and duty has increased by Rs2.21 to Rs167.51. The Inland Freight Equalization Margin on petrol is now Rs8.89, a rise of Rs1.93 per litre. The ex-refinery rate for petrol has increased by Rs3.43 per litre, moving from Rs165.30 to Rs168.73 per litre. Carbon levy on both petroleum products (petrol/HSD) is unchanged at Rs2.50 per litre. Petroleum levy on petrol is kept unchanged at Rs75.52 per litre and HSD Rs74.51 per litre. Premium on petrol has been fixed at 9.608 per bbl and $3.250 per bbl on HSD. According to a notification issued by the Finance Division late Tuesday night, petrol price has been raised by Rs5.36 per litre, while diesel has been increased by Rs11.37 per litre. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
USC to be shut down by 31st, employees offered VSS
ISLAMABAD: The government has decided to close all operations of Utility Stores Corporation (USC) by 31stJuly 2025, and offer a financially viable Voluntary Separation Scheme (VSS) for its employees. A high-level meeting of the committee constituted by the prime minister to oversee the closure and privatisation of the USC was held on Wednesday with the Federal Minister for Finance and Revenue, Muhammad Aurangzeb, in the chair. The committee has been tasked with ensuring a smooth and transparent closure process, formulating a suitable VSS for USC employees, and recommending a structured timeline for privatisation. Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, secretary Establishment Division, secretary Finance Division, secretary Industries and Production Division, managing director of the USC and senior officers from the Finance and Revenue Divisions attended the meeting Wednesday. The committee led by the finance minister reviewed the progress made in the light of the tasks assigned to it and held detailed deliberations on the way forward. It was reaffirmed that, in accordance with the government's directives, all operations of USC will be closed by 31st July 2025. The committee discussed at length the formulation of a fair and financially viable VSS for the USC employees. During the course of the meeting, the members examined various dimensions of the proposed VSS, including its projected size, potential fiscal impact, and legal and operational implications associated with its structure and rollout. The committee recommended that the Privatization Commission be consulted regarding the optimal structuring and feasibility of privatisation or alternatively asset sales linked with the USC operations. To facilitate a comprehensive analysis, the chair constituted a sub-committee headed by the secretary Establishment Division. The committee will include representatives from the Finance Division and the Industries and Production Division to examine the legal and operational aspects, contours, size, and structure of the proposed VSS and submit its report to the main committee by the end of the week. This will enable the committee to consolidate its findings and finalise its report and recommendations to be submitted to the prime minister in line with the terms of reference. According to the USC restructuring plan recently shared in the Senate Standing Committee on Industries and Production, the closure of 1,925 loss-making Utility Stores outlets countrywide has resulted in saving of Rs1.7 billion. The government has shut down 1,925 loss-making Utility Stores outlets countrywide while sacking 4,060 employees out of a total of 11,614. According to officials, in case, the government failed to privatise the USC, annually Rs7 billion will be required to pay the salaries of the employees. At present, the privatisation process had been stopped because of a lack of its audit for two years. 'The privatisation will take place after the audit is complete,' the officials said, adding that 5,000 permanent employees would be sent to the surplus pool, while 2,554 employees still on contracts and on daily wage basis would be laid off. There were 3,742 Utility Stores outlets across the country, out of which, the government has shut down 1,925 loss-making stores. USC's monthly losses had been reduced to Rs220 million. It was also disclosed that the USC will not have sufficient funds to pay salaries to its 5,000 employees beyond next month, due to the closure of a significant number of its outlets. According to officials the USC's outstanding payment stand at Rs25 billion. The management has decided to offer golden handshake scheme to 25 percent of the USC employees, otherwise, Rs2.7 billion annually will be spent on the salaries of these employees. Copyright Business Recorder, 2025
