Budget 2024-25
Federal government to announce stringent measures in the 2024-25 budget to curtail expenses, including significant cuts in pensions except for defense, civil armed forces, and police personnel, cessation of funding for provincial development projects, and cost-sharing of the Benazir Income Support Programme (BISP) with provinces.
A panel recommended these measures to Prime Minister Shehbaz Sharif, as per sources within the Cabinet Division. Last month, a seven-member committee, led by the Deputy Chairman of the Planning Commission, was formed to devise a practical plan for reducing government expenditure.
The committee’s recommendations aim to slash government expenditure by up to Rs300 billion annually. Dr. Kaiser Bengali conducted a study on the size of the federal government, while Dr. Farrukh Saleem assessed proposals to reduce spending on Pakistani missions abroad.
The proposed measures include implementing a contributory pension scheme for all federal government recruitment from July 2024, except for defense, civil armed forces, and police service, aligning with recommendations from IMF and other lending institutions.
Moreover, a ban on establishing new universities under the Higher Education Commission (HEC) is suggested to alleviate the burden on the federal government, with provincial universities’ finances to be met by their respective provinces.
Provincial governments are recommended to share the financial responsibility for the BISP program, with contributions gradually increasing, starting from 25%, and special considerations for underdeveloped regions.
Additionally, all Sustainable Development Goals (SDGs) and provincial nature projects may be closed from the next financial year, with federal subsidies for provincial subjects withdrawn.
The Finance Division is tasked with preparing comprehensive proposals for pension reforms and revisiting the National Finance Commission Award.
State-Owned Enterprises (SOEs) will be reviewed based on their functions, and a framework criterion will be developed for their categorization. Furthermore, reorganization of the federal government entails abolishing vacant posts from BS 1-16 and considering the abolition of posts from BS 17-22.
The committee agreed to abolish positions in BS 1-16 vacant for a year, emphasizing benchmarks for essential service provisions.
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