By Fahad Al Ghadani — MUSCAT: Jan. 7: The semi-government companies must stick to a 3 per cent annual pay rise for their employees, the Ministry of Finance (MoF) has said. A circular sent to the chairmen of companies with a 40 per cent government stake has said the pay rise should not exceed 3 per cent in semi-government firms. It also said the hike should be based on annual performance of the employees. The circular, signed by Darwish bin Ismaeel al Balushi, Minister Responsible for Financial Affairs, said the decision has been taken to “cushion the economy which is struggling due to the oil price slump”.
Last year, the ministry issued a number of circulars scrapping benefits such as health insurance for employees and their families, life insurance allowance, car insurance allowance for the staff and family members, loans, bonuses, incentives during Ramadhan and increments not related to employee’s performance. Circulars were also sent to stop allowances for school fees, mobile phones/bills, annual medical check-up for employees and their families, provision of private cars to senior managers, annual leave tickets, house-maid allowances, housing rents, furniture allowances, credit cards for CEOs, hospitalisation fees and other allowances.
Last Sunday, the ministry issued a statement on the State’s General Budget for the fiscal 2017.
The budget has been affected by oil price dip since mid-2014. Oil prices have remained at low levels.
Therefore, 2016 budget lost more than 67 per cent of oil revenues despite the high output.
The year 2016 witnessed the lowest traded price of Oman oil, where the price dropped to less than $24 in January.
However, the government was able to obtain funds to finance spending and take a number of measures and policies to help minimise the impact of low oil prices on financial/ economic performance.
The framework of 2017 budget comes in line with the approach adopted in the last two years.
It aims at rationalising spending and enhancing its efficiency as well as keeping public spending at sustainable levels.
The plan has been to review the non-oil revenue in order to raise its contribution in aggregate revenues and reduce dependence on oil revenue, besides utilising any resultant increase in oil revenue to financing fiscal deficit and enhancing government reserves.