The Financial Express

Civil admin the leviathan-II

Civil servants get stunning benefits

20pc of budget spent on pay, allowances

Jasim Uddin Haroon | Published: August 19, 2019 10:12:07 | Updated: August 19, 2019 20:00:28

Picture used for illustrative purpose only Picture used for illustrative purpose only

Pay packages including fringe benefits abound for the civil servants in Bangladesh with experts questioning the efficacy of the spending spree at the cost of taxpayers' money.

The remuneration including benefits, direct and indirect, ranges from daily mobile-phone bills to long-term housing loans at a subsidised rate of interest, according to official documents.

The government argues that such facilities will raise the efficiency level of the administration.

But experts do not see any visible improvement to that end.

People at the Cabinet Division see some improvements in digitalisation like 'e-filing.' But 'e-governance' still remains a big challenge, they say.

The monthly remuneration of the 1.3 million (13 lakh) civil servants almost doubled in July 2016 from the level in 2009 ballooning the outlay of allocations from the state coffer.

The civil servants are entitled to a housing loan facility effective from October last. The loan is offered for a period of 20 years. The upper limit of it is Tk 7.5 million and it carries a simple interest rate of 10 per cent, according to official documents seen by the FE.

Of the 10 per cent, the government pays 5.0 per cent in the form of subsidy and the loanee pays the remaining 5.0 per cent.

Thus an employee gets between Tk 18,000 and Tk 27,000 a month in the form of this subsidy, depending on the size of the loan and the length of service, to repay the bank money in a maximum of 240 instalments, according to a cell in operation to handle the matter at the Finance Division.

A senior official at the division said the government allocated an amount of Tk 4.0 billion (400 crore) to pay the government's portion of the interest for the current fiscal year. This is four times as much as the allocation of Tk 1.0 billion for hundreds of youths for start-ups.

On the other hand, the car loan facility, introduced in 2014, now has been extended up to the deputy secretary level. The deputy secretaries are also entitled to the same facilities as the joint secretaries.

The government spent Tk 3.7 billion during the fiscal year 2017-18 to purchase about 1,260 cars at a time when deputy secretaries became entitled to enjoy the same facilities, official data showed.

And the most interesting aspect of the benefit is that the pensioners who had already withdrawn all their benefits at one go are now eligible for pension facilities again. They are now 20,000 in number. This is a facility for those pensioners who have crossed 15 years after retirement.

Ali Imam Majumder, a former cabinet secretary, has told the FE that housing and car loans are good in a sense that they help uplift their living standard in society.

"But to my mind, the abuse of such facilities must be stopped," he uttered.

He said the officers might abuse the cars instead of using them for official purposes. "If they use their cars for ridesharing services like 'Uber' or 'Pathao' or for other personal purposes, the main spirit of introducing the facility will be lost."

He also said even many people might take large loans only to enjoy the simple interest rate benefit and pocket the subsidy money.

"Someone may invest the money in Sanchayapatra, as it will give him at least 7.0 per cent in extra yield," Mr Imam said.

Incentives are good in a sense that they motivate the employees. Efficient and transparent spending of the public money is very important. People pay both direct and indirect taxes in the hope that life will be better for them as suggests the "benefit approach theory" of public finance.

Dr Iftekharuzzaman, executive director at the Transparency International Bangladesh (TIB), told the FE that some benefits like the housing loan are good as they will help get shelter which is a constitutional right of a citizen.

"But if an official buys an apartment at the cost of taxpayers' money and rents out it to others, it cannot be justified."

People expect that their money will be best utilised, he said.

"Can we ensure perfect use of the incentives? Can we stop abuse of the car loan facility?"

Currently, pay and allowances account for the biggest share of the annual budget, nearly 20 per cent, followed by interest payment. It is equivalent to around 4.0 per cent of the GDP (gross domestic product).

Dr Ahsan H Mansur, executive director at the privately-owned think-tank Policy Research Institute of Bangladesh (PRI), told the FE this type of reward is not the right way to improve the service delivery.

He said the government enhanced salaries and other benefits aiming to make the administration efficient and bribe-free.

"More than three years after the National Pay Commission recommendations, could we get better and efficient services?" he questioned. He himself gave the answer saying "no."

He said: "It is funny that the quality of services has not improved, but they are paid at the cost of public money."

Dr Mansur who had served as the division chief in the Middle East at one of the Bretton Wood institutions -- IMF -- said the accountability should be ensured in a bid to get quality services.

"They also should be empowered," he noted.

Sharing his IMF experiences, Dr Mansur said there is a system of wealth assessment for each staffer. They assess it through a mechanism employing a third party.

"We have such a system, but the evaluation is not done through a third party."

Dr Akbar Ali Khan, a former cabinet secretary, said Bangladesh is largely exceptional.

All nations conduct reforms to improve their public administration but this nation does not, he added.

"We usually avoid conducting administrative reforms," Dr Ali said in his latest book "Abak Bangladesh: Bichitro Cholonajale."

Faiz Ahmed, secretary to the Ministry of Public Administration, could not be reached for his comment despite repeated attempts.



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