ISLAMABAD:
The International Monetary Fund (IMF) has raised concerns regarding the accountability framework for civil servants with discrepancies in their asset declarations. A significant majority of government employees remain exempt from publicly disclosing their assets.
The global financial institution has proposed a risk-based verification system for the disclosed information, along with potential penalties and investigations for officials whose assets surpass their declared income sources, according to government insiders.
However, due to the restrictive definition of a “civil servant,” only about 25,000 government employees will be subject to asset disclosure, even after amendments to the Civil Servants Act. These changes were introduced as part of the IMF’s conditions for Pakistan’s $7 billion loan agreement, sources confirmed.
Employees of autonomous and regulatory bodies—such as the State Bank of Pakistan, the National Electric Power Regulatory Authority, the Oil and Gas Regulatory Authority, and the Pakistan Telecommunication Authority—along with provincial civil servants, will remain exempt from mandatory digital asset declarations and public disclosures.
Most critical financial decisions are made by employees working in these institutions, as reflected in the numerous audit objections raised by the Auditor General of Pakistan.
IMF Concerns and Government Discussions
An IMF delegation, currently in Pakistan, held discussions with the Establishment Division regarding promotions, postings, and the accountability of civil servants from grade 17 to 22. According to government officials, the delegation emphasized not only asset disclosure but also decisive action against corrupt officials.
These discussions coincided with the federal cabinet’s approval of amendments to the Civil Servants Act of 1973.
New Amendment
A new clause, 15-A Declaration of Assets, has been added to the Civil Servants Act, requiring civil servants to declare their assets. Additionally, the Right of Access to Information Act of 2017 has been revised to facilitate public disclosure.
The amendment specifies that, despite existing restrictions under Section 7(g) of the Right of Access to Information Act, asset declarations of civil servants in BS-17 and above—including those of their spouses and dependent children, covering both domestic and foreign assets—will be made publicly accessible through the Federal Board of Revenue (FBR). However, the extent of public disclosure will balance governance interests with individual privacy and security.
This amendment is among the 40 commitments Pakistan has made to the IMF in exchange for the $7 billion loan package.
An IMF delegation focused on governance and corruption assessment met with the Establishment Division to discuss reforms aimed at curbing corruption in the bureaucracy. Officials assured the IMF that the new amendment would soon be tabled in the National Assembly for approval.
Government sources also revealed that the IMF recommended a risk-based verification system to assess the accuracy of asset declarations. Following parliamentary approval, amendments will also be made to the Government Servants Conduct Rules of 1964 to establish a mechanism for holding corrupt officials accountable.
The IMF delegation further inquired whether civil servants face penalties for non-compliance and if such penalties are publicly recorded.
Limited Scope of the Amendment
Despite the amendment, the scope remains limited, as a vast majority of officials will still be exempt from public disclosure.
The amendment applies only to civil servants as defined in the Civil Servants Act of 1973, which classifies a civil servant as an individual belonging to an All-Pakistan Service, a federal civil service, or holding a civil post connected to the federation’s affairs, including defense-related positions. However, it excludes individuals on deputation from provinces, contract employees, work-charged staff, and those paid through contingencies.
As a result, only officers from 12 occupational groups and attached departments fall under this definition—approximately 25,000 employees, including 19,000 from attached departments, according to an Establishment Division official.
Minister for Establishment Ahad Khan Cheema confirmed that the amendment applies only to employees under the Civil Servants Act of 1973.
Dr. Ishrat Husain, a former advisor on institutional reforms, previously wrote that the Supreme Court of Pakistan ruled that simply being in the Service of Pakistan does not classify an individual as a civil servant under the Civil Servants Act of 1973. A nine-judge Supreme Court bench also determined that employees of autonomous bodies and corporations under the federal government do not fall under the civil servant category.
Pakistan’s public sector workforce exceeds 3.4 million employees across federal and provincial levels, spanning grades 1 to 22. Autonomous organizations employ 389,923 individuals, while provincial governments have 1.8 million employees.
Challenges in Governance
During discussions with independent experts, the IMF delegation was informed about Pakistan’s deteriorating governance and increasing corruption. Experts pointed out that the country has become ungovernable, primarily due to the large population size of provinces, which surpasses the total populations of many independent countries.
Some experts proposed dividing existing provinces into smaller administrative units. One suggestion was to convert 31 divisions into separate provinces to improve governance, service delivery, and equitable resource distribution. Experts also argued that Pakistan’s population figures are often inflated due to the allocation of federal resources based on population size.
The experts further highlighted overstaffing and corruption in the Federal Board of Revenue (FBR) and discussed the decline in judicial and bureaucratic efficiency over the years, according to government sources.
The IMF continues to push for robust governance reforms as part of its financial assistance program, stressing the need for stronger transparency and accountability measures in Pakistan’s bureaucracy.
