THE TICKINGPENSION BOMB.

Present public perception benignly ignores the fact thatPakistan's economy was put in dire straits by the PML(N) govt. The PTI narrative was late in propagating this, PML (N) and PPP have taken full advantage of it. The acute fiscal and monitory problemswere belatedly being addressed by this government when the current pandemic shatteredeconomics all over the world. While burgeoning prices were initially acutely felt, the lack of effective monitoring of prices have led to a substantial increase, particularly in food items. The GDP growth of 5.6% in the year 2017/18 came down to about 2.4% in 2018/19. Expected around 2.5% in the current fiscal yearit is now likely to go down to (-)1.5%. The next budget will likely be quite difficult because of a large number of workersreverting back to

Pakistan from the Middle East.This has caused a temporary increase in remittances; however, technology, if it is implemented without bureaucratic constraints, can remedy this by direct payments, both to accounts directly and throughindividual mobile telephones. Already under pressure our exports are likely to be hit hard, further complicated bythis year's low yield of cotton, wheat and vegetables creating the need for more imports. While searching for out-of-the-box solutions for our problems, reducing expendituresis the need of the hour. The increasing of pensions is a tickingbombmaking for a big chunk ofthe budgetary expenditurewhichneeds immediate attention.PM Imran Khan rightly asserted in a cabinet meeting in Augustthat the ballooning pension expenditure will become our biggest budgetary challenge, further squeezing the space for development unless tackled quickly. The annual federal pension payments of Rs470bn,mostly consisting of military pensions, has grown close to the annual wage billwith Federal and Provincial pension liabilities already becoming fiscally unsustainable. The defence-related expenditure has swelled phenomenally because of pension and commutation

thereof, whatever head this expense is parked in for accounting purposes, where are the revenues?There will be consequently little forsecurity expendituresin the coming decade. 'Pension Commutation' consumes a significant yearly portion of the national budget. A plan to make the pension fund self-sustaining needs a separate and detailed study. Retiring much earlier than their civilian counterparts Armed Forces personnel can still contribute to national life without becoming a burden on the...