Pakistan's Finance Minister Muhammad Aurangzeb on Tuesday announced that the federal government has decided to cut the number of affiliated agencies by half, abolishing 150,000 jobs, as part of a sweeping cost-cutting and efficiency drive.
"We are reducing the federal government's size step by step. So far, 80 departments have been consolidated into 40," Aurangzeb said at a press conference where he highlighted the government’s goal to complete these reforms by June 2025.
He added that 60 per cent of vacant positions have been abolished, which comes to 150,000 government jobs.
He said that right-sizing was part of the restructuring initiative launched in mid-2024 by a committee formed under Prime Minister Shehbaz Sharif to rationalise expenditures and improve performance.
According to the minister, the committee was to look into 43 ministries and their subordinate agencies. He said that the federal government’s annual expenditure on these departments was Rs900 billion.
He said that the six ministries that the government had initially selected for right-sizing included Kashmir Affairs and Gilgit-Baltistan, States and Frontier Regions (SAFRON), IT and Telecom, Industries and Reproduction, National Health Services and Capital Development Authority (CAD).
He said that the Ministry of Kashmir Affairs, Gilgit-Baltistan and SAFRON are being merged and CAD is being abolished.
According to the minister, in the second phase, out of the 60 subordinate institutions of the Ministry of Science and Technology, Commerce Division, Housing and Works, and National Food Security Research, 25 institutions will be abolished, 20 will be reduced in size and nine will be merged.
“We took four ministries in the second phase and after that, we have now taken five more ministries,” he said, adding that those selected for the third phase were ministries of Federal Education and Professional Training, Information and Broadcasting, Power Division, Finance Division, and National Heritage and Culture.
He said that work had been done over the past several years to reduce the size of the federal government, but "the problem was that if you wanted to do everything possible at once, it couldn't be done, so we decided to do it gradually, in stages." The minister said the federal government also plans to transfer hospitals to provincial administrations. “This is not just about cutting costs; it’s about improving efficiency,” he said.
Aurangzeb also said that the plan was to shift Pakistan’s economic framework towards export-driven growth, supported by digitalisation and technology initiatives and the prime minister is expected to inaugurate a new technology-related program in Karachi soon.
He said that the government’s focus on macroeconomic stability helped the key indicators to improve and Pakistan was standing at a promising economic juncture due to various government efforts.
The size of the Pakistani government came into the crosshairs after the sharp increase in expenditures and questions were being raised over it.
The current government has been taking steps and reducing the size and expenses. It abolished the traditional pension system for government employees last year and reduced the pension benefits for the current employees.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
