ISLAMABAD: In a significant move to cut administrative costs, the government has announced plans to eliminate 150,000 vacant positions, dissolve one ministry, and merge two others. Finance Minister Muhammad Aurangzeb made this announcement as part of the reforms tied to the $7 billion loan agreement with the International Monetary Fund (IMF).
The IMF Executive Board recently approved the loan, with the State Bank of Pakistan receiving the first tranche of approximately $1.03 billion under the 37-month Extended Fund Facility (EFF) program.
During a press briefing, Aurangzeb stated that following federal cabinet approval, a rightsizing committee decided to scrap 60% of the vacant posts, a move aimed at reducing government expenditures significantly. The Capital Administration and Development Division (CADD) will be dissolved as part of this initiative.
A government spokesperson confirmed that several high-ranking officials would also face job cuts. “The rightsizing committee has reviewed six ministries, with one ministry approved for dissolution and two others set for merging,” the spokesperson noted.
As part of broader reform efforts, the cabinet committee on institutional reforms recommended not only the elimination of vacant positions but also a ban on contingency recruitment and the outsourcing of non-core services, such as cleaning, which may lead to a gradual phase-out of many lower-grade positions.
In a meeting chaired by Prime Minister Shahbaz Sharif, the finance minister presented recommendations for rightsizing federal government departments. The Ministry of Finance has been tasked with overseeing the cash balances of other federal ministries.
Aurangzeb emphasized that these measures, alongside the IMF bailout package, aim to bring economic stability to the country. He also highlighted the need to expand the tax net, noting that only 14% of retailers are currently registered for sales tax. He warned that the government would have to block utility services for non-registered individuals, indicating that all tax exemptions have been revoked.
To enhance the efficiency of the Federal Board of Revenue (FBR), the government plans to hire 2,000 chartered accountants and tax audit experts to improve auditing capabilities.
These reforms represent a significant step towards addressing the country’s economic challenges and streamlining government operations.
