Govt briefs IMF to layoff surplus staff, ministry mergers to cut expenditures

The government has informed the International Monetary Fund (IMF) of its plan to lay off surplus employees through a golden handshake scheme as part of efforts to manage expenditure amid concerns over weak revenue collection. The IMF has also questioned the rationale for retaining federal ministries in areas that constitutionally fall under provincial jurisdiction, The Express Tribune reported. 

During a briefing on government downsizing, the Cabinet Division outlined plans to amend the Civil Servants Act 1973, which currently protects employees from termination. The amendment would allow for layoffs, aligning the civil bureaucracy structure with the military, where only top-performing officers are retained.

Officials informed the IMF that previous downsizing efforts, including abolishing vacant positions and merging ten small departments, resulted in minimal savings of Rs17 billion. Meanwhile, the recent expansion of the federal cabinet, which now includes over 50 ministers, further complicates cost-cutting efforts.

The government has proposed eliminating thousands of vacant positions from grade 1 to 22, expecting to save over Rs12 billion, including Rs2.5 billion from 700 higher-grade positions. Additionally, merging or closing various organizations is estimated to save another Rs5 billion.

Some of the entities closed or merged include the Jammu & Kashmir Refugees Rehabilitation Organization, which has been shut down, while the Chief Commissioner Afghan Refugees Office is being restructured in line with the government’s Afghan repatriation plans. 

The Special Economic Zones Authority, Special Technology Zones Authority, and Export Processing Zones Authority are being merged into the National Industrial Development Regulatory Authority.

The Human Organs Transplant Authority has been absorbed into the Islamabad Healthcare Regulatory Authority, and the National Trust for Population Welfare has been closed. The Sheikh Zayed Postgraduate Hospital is being transferred to the Punjab government, while Pakistan Institute of Medical Sciences (PIMS) is set to come under the Islamabad Capital Territory administration. The National Fertilizer Corporation and the National Productivity Organization will also be shut down.

The Ministries of States and Frontier Regions and Kashmir Affairs & Gilgit-Baltistan have been merged. The Aviation Division has been placed under the Ministry of Defense, though the government has created a new Public Affairs Unit, appointing Rana Mubashir Iqbal as federal minister and Abdul Rehman Kanju as Minister of State.

The IMF has questioned the necessity of retaining ministries such as Education and Health at the federal level, as these subjects fall under provincial jurisdiction. The global lender also raised concerns over overstaffing in Public Sector Development Programme (PSDP) projects.