To reduce expenditure on IMF demand: Govt abolishes 150,000 vacant posts

ISLAMABAD: With announcement of undertaking right-sizing exercise across the board for all ministries, Minister for Finance Mohammad Aurangzeb unveiled implementation status of 16 ministries in different stages where 50 percent attached departments had been approved for winding up.

He also announced abolishing of vacant 150,000 budgeted posts in all ministries and attached departments. The government also decided to bring legislative changes through amending the Civil Service Act to relieve public sector servants, and plans to merge ministries, departments.

However, the public sector employees cannot be abandoned with the stroke of a pen and they may be placed at the surplus pool or offered Voluntary Separation Scheme. But the government did not share anything about redundant departments.

The government aimed at bringing down expenditure from the existing level of Rs880 billion incurred on ministries and attached departments on an annual basis. However, all questions raised by the journalists went unanswered as no reply was given on questions related to identification of winding up attached departments i.e. how many employees would be relieved and what’s the justification of undertaking this exercise when the government is planning to expand the federal cabinet to induct more ministries, minister of states and advisors.

For ministry-specific decision, the government approved that entities to be reduced from 80 to 40 as follows: Kashmir Affairs and Safron to be merged; Capital Administration and Development Division (CADD) would be abolished, IT & Telecom ministry would be reduced from 11 entities to 10 entities, Industries & Production from 31 to 6 and National Health Services from 30 to 20.

“The right sizing of the federal government is part of the Structural Benchmark of the IMF programme. We have so far reviewed 15 ministries and Prime Minister Shehbaz Sharif has so far approved recommendations of 10 ministries. One ministry, the CADD, has been abolished while another ministry will be merged. All 42 ministries related right sizing exercise will be accomplished till end of June 2025,” the finance minister told a presser at state-run TV headquarters on Tuesday. Flanked by Pakistan Muslim League-Nawaz leader Bilal Azhar Kiani, Ambassador at Large Salman Ahmed, FM’s Advisor Khurram Shehzad and others on the occasion, Aurangzeb said that the Treasury Single Account (TSA) would be implemented for net cash balance arguing that 80 to 85 percent departments had implemented it already, and remaining would have to come into it. He said that there was no justification of getting borrowings when the amount was parked into accounts of different banks by the public sector departments.

Announcing major decisions, the minister said that 60 percent vacant regular posts have been abolished while 150,000 vacant budgeted posts would cease to exist. He said that the general noncore services such as cleaning, gardening and others will be outsourced. The contingency posts will be reduced. Fourthly, he said that the net cash balance in all government departments will be implemented.

Ambassador at Large Salman Ahmed said that there was a prospective of taxpayer as resources collected from them could not be wasted, so right sizing exercise would bring efficiency in the government working.

The finance minister said that under Wave-I six ministries were reviewed including Kashmir Affairs and Gilgit-Baltistan, States and Frontier Region, IT and Telecom, Industries and Production, National Health Services and Regulation and Capital Administration and Development Division out of which it was approved to merge Kashmir Affairs and Gilgit Baltistan with States and Frontier Region. There are 80 attached departments in selected six ministries out of which 40 would be wound up. In the Wave-II, five ministries were reviewed including Board of Investment, Ministry of Commerce, National Food Security and Research, Housing and Works, Science and Technology out of which there are 60 entities, and 25 will be wound up, 20 will be reduced, nine will be merged. In the Wave-III, five ministries including Federal Education & Professional Training, Information & Broadcasting, National Heritage and Culture, Finance Division and Power Division are currently being reviewed. The Right Sizing Committee has finalised recommendations for getting approval of the prime minister and federal cabinet. According to official document – ‘Pakistan’s Federal Government’s Rightsizing Initiative’ -- the federal government has embarked on a bold and transformative rightsizing initiative to streamline its operations, eliminate redundancies, and reallocate resources for better public service delivery.

Under the leadership of the prime minister and supervision of the finance minister, a high-powered committee was established on June 21, 2024, which reflects the government’s commitment to fiscal responsibility, operational efficiency, and citizen-centric governance. The recommendations of the committee are based on the merit and needs of the departments and positions.

Key Objectives of the Rightsizing Initiative:

1- Optimising Government Functions: It included identify functions that can be outsourced or privatised while maintaining public benefit, eliminate overlaps and duplication, particularly in post-devolution areas with provinces, enhance value for public spending through efficiency reforms, including digitisation.

2- Comprehensive Review of Federal Entities: The scope includes 43 ministries/ divisions and nearly 400 attached entities, assess each function’s relevance, impact, and potential for public-private partnerships.

3- Strategic Phased Implementation: It has divided the initiative into structured waves to minimise disruption.

4- Key Decisions and Outcomes: It includes streamlined government structure as over 150,000 vacant posts (60 percent) will be abolished or declared redundant, contingency roles and lower-grade positions will be significantly reduced, non-core services like cleaning, plumbing, and gardening will be outsourced.

5- Enhanced Service Delivery: Citizens will benefit from faster, more efficient services enabled by digitisation and improved governance structures.

6- Regulatory Reforms: it proposed amendments to the Civil Servants Act to align governance practices with modern needs.