Implementation plan: PM asks austerity panel to engage stakeholders

ISLAMABAD: Agreeing to a comprehensive set of proposals submitted by the Austerity Committee to save taxpayers’ money from government spending, Prime Minister Shehbaz Sharif has asked the body to engage all stakeholders for the implementation plan.

The proposals if implemented will massively cut the perks, privileges and other luxuries enjoyed by the ruling elite, parliamentarians, judges, generals, civil and military officers from taxpayers’ money.

Some highlights of these proposals include major cut in the size of cabinet, no development funds for MPs; no pension beyond Rs500,000 per month to anyone from public kitty; no use of SUVs by government officials; withdrawal of all perks of retired civil servants, judicial officers of superior courts and of uniformed services viz vehicles, security, support staff and utilities; 15 percent cut in the salary and allowances of all MNAs, MPAs and Senators; 15 percent cut in the current budget of all ministries, divisions, departments etc at federal and provincial levels; only one plot be allowed to all government servants, bureaucrats, judges and armed forces’ officers; more than one plot already allotted as well as additional land allotments be cancelled and put to open auction; No new greenfield project except in special industrial zones under CPEC; ban on recruitment; scaling down of security protocols for all.

While presenting these proposals, the Committee noted that implementation of these recommendations would be a tough task but given the fiscal conditions of the country, it is imperative that all segments of the society, particularly those paid out of public funds, should contribute to the austerity efforts.

The Committee, which was headed by a respected retired secretary Nasir Khosa, recommended a cut in the size of the cabinet to 30 members but provided the option of additional cabinet members or special assistants with the status of minister or minister of state to work on a pro bono (free of charge) basis. It seeks review of protocol and security arrangements of all top government functionaries.

The Committee proposed a 15 percent cut in the salary and allowances of all MNAs, MPAs and Senators. The Committee also sought a 15 percent cut in the current expenditure of all ministries, divisions, attached departments, subordinate offices, autonomous bodies, provincial governments and the budget allocated to Pakistani embassies abroad.

It recommends freezing of recurrent budget till June 2024; ban on purchase of all types of vehicles till June 2024; reduction in all allowance specific/admissible for a post, organisation or care by 25 percent till June 2024; complete ban on creation of new administrative units; security protocol of all government functionaries be reviewed and scaled down drastically; complete ban on new recruitment till June 2024; discretionary grants, secret service fund be frozen; paperless environment and e-procurement be introduced and use of digital system be promoted, tele-conferencing should be promoted to reduce travelling and lodging expenditure; support services be outsourced; all entitlements regarding foreign travel, postings and visits be reviewed by Finance and Cabinet Divisions in consultation with Foreign Ministry; pension reforms being considered by Finance Division be finalised by June 30, 2023; maximum pension should be capped at Rs500,000/- per month in all cases; all posts lying vacant for three years be abolished; there should be complete ban on import of luxury vehicles; no use of SUVs by government officials; all perks of retired civil servants, judicial officers of superior courts and of uniformed services viz vehicles, security, support staff and utilities may be withdrawn; Cabinet Division to identify the agencies and government entities performing overlapping functions; Establishment Division, Finance and Cabinet Divisions to rationalise the number of ministries, divisions, attached departments, authorities, autonomous bodies etc in accordance with constitutional mandate; drastic cut in entertainment budget across the board; foreign travel on obligatory visits only; only one plot be allowed to all government servants, bureaucrats, judges and armed forces officers; more than one plot already allotted as well as additional land allotments be cancelled and put to open auction; progressive property tax be introduced in provinces; and, units of free electricity allowed to employees of power distribution companies be monetised.

In its recommendations relating to subsidies and grants, the Committee suggested all subsidies should be targeted only and the focus should only be on the poorest of the poor; only pro-poor power and petroleum subsidies should be maintained and in all other cases there should be recovery of full cost; provinces should contribute to the subsidies and grants aimed at their residents; in case of BISP and subsidies on electricity for tube well, fertilizer, etc, major chunk of beneficiaries is from provinces, therefore, contributory/sharing mechanism may be evolved on a gradual basis between federal and provincial governments; wheat subsidy should be targeted with greater role of private sector, and; prepaid metering for electricity and gas be introduced.

In its recommendations relating to development budget, the committee proposed that no new greenfield project should be included in PSDP except for those related to special economic zones in CPEC project; ongoing/approved development projects may be reviewed and only most important and unavoidable and feasible projects may be processed further for completion; Planning Division to carry out a comprehensive review of the development projects. Federal government should fund only those development projects which come under its constitutional jurisdiction; the existing system of identification of development projects through MPs in place since 1985 be done away with; in its place sectoral growth strategies may be adopted.

The Committee recommendations relating to state owned entities says that business and commercial activity is not the function of the government. Therefore, SOEs carrying out commercial activities may be shifted to other arrangements; strengthen SOE governance through implementation of SOE law; discontinue subsidies to SOEs which do not provide any public good; establish stringent processes and criteria for loan requests.

The Committee also recommended that the Single Treasury Account on which work has been initiated by the Finance Division be implemented immediately. All special accounts be reviewed thoroughly.