The Cabinet Committee on Institutional Reforms recommended significant cuts on Friday, including the elimination of 150,000 vacant positions, a ban on contingency recruitment, and the outsourcing of non-essential services such as cleaning and janitorial work. These measures are set to phase out many positions in grades 1 to 16.
During a meeting chaired by Prime Minister Shahbaz Sharif, Finance Minister Muhammad Aurangzeb presented the recommendations aimed at streamlining federal government departments. The discussion focused on reducing the size and expenses of the public sector.
The committee has instructed the finance ministry to monitor the cash balances of other federal ministries.
In July, Pakistan and the International Monetary Fund (IMF) agreed on a new loan program, marking the country’s 24th substantial loan arrangement. Earlier, in June, PM Shehbaz had ordered the closure of the Pakistan Public Works Department (Pak PWD) due to longstanding issues of poor performance and corruption. The federal government has committed to cutting expenditures to bolster the economy.
Ministers have claimed that federal cabinet members are not receiving salaries, but experts have criticized this approach. They suggest that the government should eliminate redundant ministries and reduce non-developmental spending.
The committee provided a detailed briefing on proposed reforms for five federal ministries: the Ministry of Kashmir Affairs and Gilgit-Baltistan, the Ministry of State and Frontier Regions (SAFRON), the Ministry of Information Technology and Telecommunication, the Ministry of Industry and Production, and the Ministry of National Health Services. The recommendation includes merging the Ministry of Kashmir and Gilgit-Baltistan with SAFRON.
The plan involves closing 28 institutions within these ministries, transferring the privatisation ministry and some other ministries to federal units, and merging 12 institutions within the affected ministries.
PM Shehbaz stated that these proposed reforms should be approved by the federal cabinet, and a comprehensive implementation plan should be developed. He emphasized that reducing government expenditure is a key priority.
The premier directed that institutions failing to provide adequate public services and burdening the national budget should either be terminated or privatized promptly.
Economist Kaiser Bengali, in a recent appearance on Spotlight with Munizae Jahangir on Aaj News, warned that if the government does not cut expenses, it may seek another IMF bailout package within a year. He stressed that addressing the fiscal crisis requires reducing expenditures rather than increasing taxes.
