ISLAMABAD: Finance Minister Muhammad Aurangzeb announced on Tuesday that the rightsizing process for 42 federal ministries, as mandated by the International Monetary Fund (IMF), would be completed before June 30. However, he expressed uncertainty regarding the financial impact of abolishing 150,000 positions and the funds held in commercial banks.
During a press conference with MNA Bilal Azhar Kiani and Ambassador-at-Large Salman Ahmad, Aurangzeb clarified that rightsizing was an IMF structural benchmark, designed to streamline the government and reduce expenditure. “This initiative aims to cut down the size of the federal government and lower costs,” he said.
The minister also highlighted the commitment to transfer cash balances held in commercial banks to the treasury single account, in accordance with another IMF stipulation. He pointed out that only 15-20% of cash balances were not within the treasury single account and emphasized that this issue would be prioritized.
Aurangzeb explained that the high-powered rightsizing committee, formed by the prime minister in June, had reviewed the assets, human resources, and vacant posts in 43 ministries and their 400 attached entities. He added that decisions had been made for 15-16 ministries, and the full rightsizing process would be finalized within the current fiscal year.
The finance minister avoided commenting on controversial salary increases for top judges and select bureaucrats or the exclusion of the judiciary and Ministry of Defence from the review. However, he confirmed that all ministries were being reviewed. The committee has already abolished 60% of regular vacant posts, leading to the elimination of 150,000 positions, which would have a fiscal impact. He stated that jobs for existing employees would not be lost, as non-core positions such as peons and gardeners would be outsourced.
Despite the ongoing measures, the finance minister and his team were unable to provide the financial impact of these decisions but stated that the budget for these ministries, amounting to Rs876 billion, should decrease in the coming year. If this did not occur, it would signal failure.
Aurangzeb explained that the rightsizing process was being conducted in phases. The first phase targeted six ministries, including one for closure and another for merger. The second phase saw 25 departments closed and 20 scaled down, while the third phase addressed ministries such as education, information, and energy.
Despite claims of resistance to some decisions within the cabinet, the finance minister affirmed that 95-96% of the recommendations from the rightsizing committee had been approved, with only minor revisions required. He confirmed that public sector entities, which had admitted to minimal output, would not be granted additional time to improve. “We will wind them up if necessary, and any devolvement to the provinces will be handled systematically,” he said.
The ultimate goal of rightsizing, according to the minister, is to optimize government functions by outsourcing or privatizing services that can be efficiently handled by the private sector. Additionally, amendments to the Civil Servants Act, designed to modernize governance and offer severance packages to redundant officers, are set to be introduced in parliament soon.
