In a significant move to reduce government expenditures, the federal government has announced the abolition of 150,000 vacant posts, alongside the dissolution of the Capital Administration and Development Division (CADD) ministry.
Finance Minister Muhammad Aurangzeb made the announcement during a press briefing in Islamabad, following the federal cabinet’s approval of a rightsizing committee’s recommendations.
The committee has determined that approximately 60% of vacant positions will be eliminated. This decision aims to streamline government operations and reduce administrative costs, which are increasingly pressing in the context of the country’s ongoing economic challenges.
“Dissolution of one ministry has been approved, while two others will be merged,” Aurangzeb stated, confirming that six ministries have been reviewed in this initial phase of reform. He assured the public that the measures are part of a broader strategy linked to the recent $7 billion loan agreement with the International Monetary Fund (IMF), designed to bring financial stability to Pakistan.
The cabinet committee on institutional reforms, which convened on August 16, also recommended a ban on contingency recruitment and the outsourcing of non-core services such as cleaning. This is expected to lead to a gradual phase-out of many positions in grades 1 to 16, further tightening the government’s operational framework.
This move is reminiscent of actions taken in September 2018 when the federal government placed the Capital Development Authority (CDA) under the administrative control of the interior ministry, dissolving the CADD. At that time, the functions of CADD were redistributed among various ministries, with responsibilities such as education being placed under the federal education ministry and health services under the Ministry of National Health Services.
Government’s rightsizing efforts
In a related meeting chaired by Prime Minister Shahbaz Sharif, the finance minister presented a comprehensive plan for rightsizing federal departments. The Ministry of Finance has been tasked with overseeing the cash balances of other ministries to enhance fiscal management.
Aurangzeb emphasized the urgency of expanding the tax net, revealing that only 14% of retailers are currently registered for sales tax. He warned that the government might have to restrict utility services for non-registered individuals, as all tax exemptions have been abolished. “It is not appropriate to treat taxpayers and non-taxpayers alike,” he noted.
To bolster the Federal Board of Revenue’s auditing capabilities, the government plans to hire 2,000 chartered accountants and tax audit experts. These reforms are intended not only to address the immediate fiscal challenges but also to pave the way for more sustainable economic governance.
The decision to reduce the size of the public sector marks a crucial step in the government’s efforts to enhance economic stability and efficiency within federal operations.