EDITORIAL: Finance Minister Muhammad Aurangzeb’s announcement of the government’s decision to abolish 60 percent of vacant posts – around 150,000 positions – in a bid to streamline and optimise 43 ministries and their 400 attached departments by the end of the current fiscal year, while welcome, fails to clarify several key questions that have arisen in its wake. The rightsizing initiative, a major structural requirement of the IMF, aims to reduce the federal government’s out-of-control current expenditure bill, improve its overall efficiency, identify those government functions that can be outsourced or privatised while maintaining public benefit, and eliminate the duplication that exists with provincial government departments carrying out the same functions. However, there remains a worrying lack of clarity on the financial impact of this far-reaching endeavour while the finance minister has also yet to directly address questions on whether the judiciary and departments that come under the ministries of defence and defence production will also be subjected to similar measures.
Another component of this initiative, also directed by the IMF, requires the government to transfer cash balances of all its ministries, departments and divisions held in commercial banks to the Treasury Single Account, enabling it to borrow for other vital needs. However, significant uncertainty regarding this persists as a substantial 15-20 percent of such balances remain parked with commercial banks. Furthermore, despite the plan to abolish vacant posts and reduce the number of contingency and lower-grade positions by June 30, only 15-16 ministries out of the 43 have completed the process, even though half the fiscal year has already passed. To compound matters, there is a perplexing lack of information regarding the criteria or formula used for such a comprehensive rightsizing exercise nor much details or clarity on the financial outcomes and benefits, if any, accrued by the ministries that have completed the process, let alone any such projections for those yet to implement these changes.
It goes without saying that a core ill that has long afflicted our economy has been the continuous rise in current expenditure levels, driven by a culture of excess that exists within the public sector. This routinely results in large amounts being squandered on ineffective initiatives, and government departments frequently surpassing their budgets due to unwarranted expenditures. The inefficiency and profligate spending is compounded by the duplication of resources, as despite the 18th Amendment’s passage devolving many responsibilities to the provinces, several federal ministries performing the same functions remain active, complicating governance.
Given this, it is extremely concerning that instead of the government undertaking the crucial task of reducing wasteful spending of its own volition, it is being, in effect, dictated to by the IMF to carry out the necessary restructuring. And even this effort has been marred by much dithering and inexplicable delays. It must be recalled that the rightsizing programme was, in fact, approved by the federal cabinet in August last year. By November, press reports had indicated that only around 15 ministries had started this process, and as has been mentioned above, around the same number have completed the exercise till now, signifying the highly troubling lack of seriousness and urgency on part of the government machinery. These delays elicit little surprise as the Pakistani bureaucracy has a well-deserved reputation for a lack of initiative and being resistant to any change that may jeopardise its own interests. The government, however, must realise that any prolonged inaction on this front will only undermine the credibility of its reform efforts and further exacerbate the economic challenges facing the country. In addition to the much-needed clarity regarding the various aspects of the rightsizing exercise, there must be tangible progress and decisive action to ensure that it is effectively implemented and is completed within the given timelines.
Copyright Business Recorder, 2025