Pakistan, which is teetering on the brink of bankruptcy, is planning stringent austerity measures. It is mulling slashing the salaries of government employees, reducing the count of federal ministers and curbing the expenditure of ministries and divisions.
This comes as the Pakistani economy struggles to cope with mounting debt, global inflation and political instability, and has been pushed to the brink of collapse.
Pakistan Prime Minister Shehbaz Sharif is expected to announce the austerity measures soon, The News International reported.
The austerity measures are likely to include contractionary fiscal policies, cuts in public expenditure, selective tax hikes, pension reforms and reductions in labour protection, which are implemented by governments to reduce spending.
– The austerity measures in Pakistan will limit perks and privileges granted to government officials as well as pensions, including that of retired judges.
– Furthermore, it is expected that half of Pakistan PM Shehbaz Sharif’s Cabinet will work without any salary or privileges.
– Austerity measures could include cuts in the budget of all government entities — the withdrawal of certain perks and privileges of Cabinet members, parliamentarians and government servants, including luxury vehicles and security/ protocol.
– There will be a 15 per cent cut in the salaries of the remaining Cabinet members.
– There will be a complete ban on recruitment, whereas all government posts that have been vacant for the last three years will be abolished.
– Discretionary grants, secret service funds of the Inter-Services Intelligence (ISI) and Intelligence Bureau (IB) will be capped.
– No new government entity will be created, whereas the Cabinet, establishment and finance divisions will review the size of the present federal secretariat to reduce the number of ministries and divisions.
– In selected departments, those enjoying free electricity will have a new rule — no free electricity.
PAKISTAN’S ECONOMIC CRISIS
Pakistan, which is in dire need of funds as it battles a wrenching economic crisis, has received financial assistance from the IMF in the past and is presently in discussions with the organisation to resume its loan programme.
Meanwhile, foreign exchange reserves held by the State Bank of Pakistan have fallen to around USD 3 billion, barely enough to cover three weeks of controlled imports.