World Bank asks Punjab to cut pensions, retirement benefits

The recommendations to reduce the expenditures of pension and retirement benefits in Punjab have been presented to the Pension Reforms Committee headed by ministers, the 24NewsHD TV channel reported on Friday.

A 10 per cent cut in retirement benefits has been suggested, sources said, adding that it has been proposed to pay 25 per cent of gratuity to a retiring official instead of 35 per cent.

The Word Bank made these suggestions under the Punjab Resource Improvement and Digital Effectiveness (PRIDE) programme to save from Rs15 billion to Rs20 billion.

Reportedly, the PRIDE project will target to help Punjab increase efficiency in its public expenditure, close its large tax gap and create fiscal space for growth-enhancing expenditure on infrastructure and human capital by deepening ongoing public financial management reforms.

The five-year programme also incorporates the use of Information and Communication Technology (ICT) to support service delivery in the wake of the Covid-19 health crisis while also supporting reforms to improve the management of emergencies and mitigate disaster risks in the future. The programme supports Punjab’s development response to the Covid-19 challenges as it tackles the key reform actions that are not amenable to private-sector financing.

The reforms are intended to support the implementation of government policies, improve service delivery, and reduce fiduciary risks by strengthening budget formulation and fiscal risk management, as well as through the increased use of digital technology for the delivery of selected public services. Reports suggested Punjab made significant progress in public financial management reforms during 2015-20.