The Cabinet Committee on Economic Revival (CCER) is working on a comprehensive strategy to reduce expenses by Rs1.4 trillion. As per reports from The News, the interim government, led by Anwaar-ul-Haq Kakar, has several recommendations for austerity, including freezing salaries, pensions, and allowances. The committee’s agenda also includes the gradual change in the officer-to-staff ratio to 1:3 across federal and provincial sectors.
Uncertainties linger regarding the exact timeline for the plan’s implementation. Major cost cuts are also anticipated through reevaluating untargeted subsidies, grants, and the Rs1.4 trillion funding for various institutions and departments. The largest financial strain comes from the power sector subsidies, which demand nearly Rs0.97 trillion of the Rs1.064 trillion total subsidy budget.
The committee’s suggestions include cutting back on non-essential federal handouts and reshaping development programs. Refocusing Public Sector Development Program (PSDP) schemes might save the federal government an estimated Rs315 billion this fiscal year. Moreover, reducing costs on devolved subjects could mean another Rs328 billion in savings.
The future of several development projects remains uncertain. On another front, the government is leaning towards public-private partnerships, with half of the PSDP portfolio transitioning to the Public Private Partnership (PPP) Authority. To bolster private sector involvement in infrastructure, the government seeks support from Infrazamin, a credit enhancement facility, alongside green bonds, debt swaps, and the Sustainable Finance Bureau.
In line with IMF’s conditions under the $3 billion standby arrangement, the government will not permit supplementary grants for this financial year.
