The government's austerity plan has been partly compromised with the expansion of the federal cabinet as the decision to reduce the cabinet size was, according to President Asif Ali Zardari in his address to the joint session of parliament on March 22, a 'tough decision'.
"We are not afraid to lead; and we know the way. The government reduced the cabinet size. The subsidy regime has been rationalised. Tax reforms have been introduced to mobilise resources. The tax net is being expanded through introduction of the Reformed General Sales Tax," the President had stated. The International Monetary Fund website in its press release dated May 17 referred to increasing government debt, and urged improving debt management thereby highlighting the need to implement the austerity measures that have been approved by the federal cabinet.
The government, as part of its ongoing reconciliation policy, inducted about 19 Federal Ministers, State Ministers, Advisors to the Prime Minister and Special Assistants from Pakistan Muslim League (Q) and MQM. Each minister costs the exchequer, a cost that is fuelled by several of the new appointees spending millions of rupees on renovation of their offices.
However fully cognisant of the need for austerity the federal cabinet, comprising the new Ministers approved the following measures: (i) continuation of ban on new recruitment (due to surplus staff from devolution process) and purchase of durable goods (also due to surplus durable goods from devolved Ministries; (ii) rationalisation of fuel entitlement, travelling allowance and expenditure on stationery and newspaper periodicals; (iii) establishment of independent commission to scrutinise all development and current expenditure with a view to ensuring their necessity, efficacy and value to the public exchequer. The recommendation of the commission will identify where to effect economies; and (iv) establishment of an independent commission to examine the structure of pay and allowances in public services and bring equity and fairness across them.
The federal cabinet approved curtailment of ministries and divisions through legislative intervention. It was decided that overlapping of ministries will be examined. The public at large argues in favour of no more than 30-40 ministries at the federal level.
After the approval of 18th constitutional amendment, all the Ministers of State were relieved of their portfolios and a number of federal ministries devolved to the provinces. However, the PPP government has recently appointed new Ministers for some Ministries targeted to be transferred to the provinces by June 30, 2011.
The cabinet had also decided that the expenditure on the official residence of the President and the Prime Minister would be cut by 25 percent cut. Similar action may be taken for Governors, Chief Ministers, Federal and Provincial Ministers and other government servants/offices.
It had also been decided that simplicity may be adopted while procuring furniture and other furnishings. Furniture and fixtures may be standardised and depreciated over 10 years. Entertainment expenditures should be reduced by 30 percent. One dish should be served at government lunches and dinners. Recent reports suggest that the government has not implemented the austerity measures approved by its own federal cabinet.