PIDE Study Reveals Burden Of Recruiting Individuals For Exchequer

News Desk

Peshawar: A current study has identified that the net present value of a Grade 1 employee hired in July 2023 would be Rs 8,17,27 million, including salary and pension, perks and benefits, and operating costs, respectively.

According to the findings of the Pakistan Institute of Development Economics (PIDE) study titled ‘Lifetime Cost of Public Servants’, it has been calculated that the sums of Rs 49, Rs 136, and Rs 245 million will be required by the state of Pakistan to afford a Grade 17 officer for a period of thirty years.

The current study has investigated the burden that each newly recruited individual, ranging from Grade 1 to 22, brings on the national budget.

This prompts the question of whether or not we have sufficient revenue streams to support the compensation for the next 30 years; if not, it’s a good time to pause and consider the implications of adding a new worker to the system, given that the government will be responsible for covering the cost through taxation.

To break free of its debt spiral, Pakistan needs long-term planning; salaries and pensions are the major expenses for the institute, so the PIDE has proposed being extra careful and cost-effective before deciding to keep an employee. This way, the institute can figure out how it can afford to pay the person for the rest of his or her working life.

It is essential for governments to evaluate the long-term financial implications of immediate job creation and to find a balance between short-term benefits and sustainable fiscal policies.

While the creation of immediate jobs can have a good effect, it is equally important to note that rapid job creation can have negative effects.