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ISLAMABAD: The government is to introduce structural reforms in federal budget 2023-24, which will also include some additional measures, especially pension reforms, subsidies/ grants and reduction in losses of State Owned Entities (SoEs). This information was shared by Finance Minister Ishaq Dar, during a recent meeting of Federal Cabinet when proposed austerity measures came under consideration.

The Cabinet was informed that work had been initiated on Single Treasury Account, by Finance Division, shall be implemented immediately.

During the discussion majority Members endorsed the proposed austerity measures, while some expressed various concerns. It was pointed out that few of the ministers had no other source of earnings and relied solely on their salaries.

Dar chairs meeting on role of PDFL, SOEs

In response, it was informed that the word ‘voluntary’ had been used, so in cases where a minister had no other means of income, an exception could be made by the Prime Minister in a confidential manner.

On a query as to what would be the potential savings from these measures, figures of approximately Rs 70 billion saving in four months and Rs 200 billion annually were given. It was opined by some members that these measures were only symbolic in nature as the financial benefit was not substantial.

The Cabinet was further informed that it could leave an impression in public that salaries and allowances of the ministers, advisers and SAPMs were a major burden on the national exchequer, whereas in reality it was quite to the contrary.

Apprehensions were also expressed on the 15 percent cut in the current expenditure of Ministries/Divisions/Departments, which could negatively impact their performance. Similarly, the desirability of restrictions on foreign travel, especially of the Foreign Office, was also questioned.

Attention was also drawn to some of the measures, such as sale/utilization of official residences above 1000 sq yards in PPP mode, which fell in the domain of the provincial governments. It was, therefore, urged that instead of resorting to measures with optical value, the need of the hour was to undertake painful structural reforms, which were necessary to pave the way for sustainable economic recovery.

In this regard, tax reforms, a durable solution to energy sector challenges, addressing the issue of haemorrhaging SOEs etc. were stressed, besides reducing the size of the Cabinet by half.

Stating that these austerity measures of the government, though symbolic in nature, were necessary to lead by example and show empathy and solidarity with the poor, the Prime Minister asserted that he was strongly in favour of structural reforms and the two were not mutually exclusive.

He expressed his readiness to immediately reduce the size of the Cabinet and informed that he was already consulting the leadership of coalition partners in this regard.

The Minister for Finance drew attention to pare 4 of the summary, which clearly stated that at the time of formulation of budget for FY 2023-24, some additional measures, especially in the field of pension reforms, subsidies/grants and cutting down losses of SOEs would be included. He suggested that the words ‘structural reforms’ could explicitly be added to the Cabinet approval as well.

He further assured that an Austerity Committee was in place to give exemptions in exceptional cases, so the concerns of the members would be adequately addressed. The 15 percent cut on current expenditure could apply only to non-employee related (Non- ERE) expenditure.

He also clarified that the proposed sale/utilization of official residences above 1000 sq yards was not an encroachment on the domain of provincial governments but was restricted to properties owned by the federal government which the provinces may emulate.

The Minister for Finance requested the House that effective date for not allotting more than one plot to public / government servants be changed ‘from March 1, 2023’ to ‘with immediate effect’, so as to dispel any misgivings. In light of the clarifications given, the members were in complete unison that the proposed austerity measures should be adopted.

After detailed discussion, the Cabinet decided that Ministry of Foreign Affairs expenditure on diplomatic mission abroad may not be subjected to 15 percent cut owing to the currency depreciation effect.

It was also decided Finance Division shall include structural reforms among the additional measures to be proposed in the Budget for FY 2023-24.

Copyright Business Recorder, 2023


Comments are closed.

Muhammad Suleman Mar 03, 2023 08:45am
End the water crisis inside Pakistan If the water crisis ends then the dollar will automatically start falling
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Nihar shah Mar 03, 2023 10:21am
Please, the pension of a Frontier Constabulary soldier is 17125 rupees per month, is this fair and the monthly pension of employees and officers of other institutions is in lakhs, in this era of inflation, we are being oppressed and increased, please increase it, thank you.
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Nihar shah Mar 03, 2023 10:22am
Please, the pension of a Frontier Constabulary soldier is 17125 rupees per month, is this fair and the monthly pension of employees and officers of other institutions is in lakhs, in this era of inflation, we are being oppressed and increased, please increase it, thank you.
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Akbar Mar 03, 2023 11:35am
Financial cuts should be made on extra perks and benefits allowed to retired and serving high court and Supreme Court judges as well as parliamentarians. Those out of parliament since last 10 months are still receiving salaries and enjoying full benefits. Is this justified???????????
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Nawaz Mar 03, 2023 11:35am
what about the pensions of the Judiciary and other powerful
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KhanRA Mar 03, 2023 11:38am
These are needed reforms, but it took the IMF to force it down the throats of the elites. This isn’t an act of competence from Dar.
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Rao Tanveer Mar 03, 2023 02:45pm
Hum ne suna tha k pakistan ka pension budget federal government ka approx 1020 arab ho chuka hay. Ager World Bank ko kaha jaye k government ko employees k liay loan dia jaye, aur us loan se sub employees ko voluntary golden shake hand scheme de jaye. 250 se 300 pays. Ye golden shake hand k paisay national savings main deposit krwa diay jayen. Pakistan ka hazana b ooper chala jaye gaa aur employees aur pension se jaan b bach jaye proposal ko serious laina ho gaa. Sub countries main aisa he ho raha hay.
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Mohammad Kamran Mar 03, 2023 02:53pm
Just take one measure, introduce strict financial discipline, by ordering uniform pay, benefits and allowances, and cancelling all double triple salaries, all kinds of special benefits or allowances for all including FBR, Superior courts, presidency, Parliament, etc etc
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Mohammad Kamran Mar 03, 2023 02:58pm
Just issue special emergency order for application of strict financial discipline with 100 percent uniformity to all federal and provincial Govt servants, including all services, cadres, and departments including, FBR, judiciary, civil service, Parliament, PM Sectt, Presidency, police service, etc and abrogation of all double pays, additional pays, allowance or salaries over and above the uniform pay scales.
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Haider Mar 03, 2023 03:13pm
It's very limited action to control the elite class expenditures ,like BS-20 Officers Buearucrats are drawing more then 85000 on account of Car Maintainance ,POL,Driver etc but Drivers Posts are still in process,result double Payments are in process across Pakistan Mission Abroad where POL have no Limits same in Pakistan grooming since Pakistan and this Nation,'s Assets are leaked for many Decades let's see who in real save the Foreign Reserves as well as Financial measures to save Public Money,hope real loyal officer ,Politician will take strict Action against big cast Residential Apartments in Europe,Arab,Asian countries,while enhancing Medical Insurance Facilitation,Entertainment Allonces,Staff Car expenditures,TA/DA balance Controlled according to the Rule and Regulation,minimum Period 3years service in Mission abroad to increase Duration upto 5 years to save TA/DA on Permanent Posting billing on top priority bases, just wanna see where are Loyal and Devoted officers to take action on these saving measures , no action mean all are Drama just advertisement scope.
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Aamir Latif Mar 03, 2023 03:25pm
All this is rubbish for public consumption, why cabinet is still at 83, you set example by leasing before you ask rest to follow... Does it need rocket science for PM to understand how much he really need in cabinet. If he can't do it in 2- months, why nation will follow and beleive
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Aamir Latif Mar 03, 2023 03:28pm
Does Dar have to wait for next budget on austerity measures, vrusis now, need iurhency to act and implement starting from top.... We have seen how govt planning works, numbers get obsolete in less then 3- months post budget, supplementary budget or structure changes by ordinances etc. Chronic problem of our financial gurus
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amigo Mar 03, 2023 06:18pm
راہ دور عشق میں روتا ہے کیا آگے آگے دیکھیے ہوتا ہے کیا
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Zia Aftab Mar 03, 2023 06:26pm
Prices of petrol, electricity and food items have increased 50 to 70 percent during last one and a half years. This mainly due to inept leadership of our finance managers. Pensions We're increased only 10 percent. I fear pension reforms will deprive retired employees of the Government further. I fully agree that there is a need to review the perks and privileges Of highly paid retired officials. Perks of highly paid serving employees should Also be reviewed. Finance ministers come and go but they are the most responsible Ones to put the economy in this mess.
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Farjad Ahmed Mar 03, 2023 06:58pm
I am not an economist so I'll not comment but I have a firm conversation that ONLY if corruption levels are lowered, there is no need for any other thing. If for the sake of argument today corruption has a figure of 1, it should be brought to 0.1, yes within a span of 5 years.
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Ijaz ur Rahman Mar 03, 2023 08:57pm
This pdm government has lost confidants of economic institution as they have promised Right now even ministers are not ready to combat inflation and are opposing austerity measures taken by prime minister so this cabinet should be dissolved and new elections should be announced very soon other wise the conditions may get worse in coming days.
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Nazeer chaudhry Mar 03, 2023 09:01pm
Urgent measures are required to save vanishing economy 97 percent destroyed economy and to prevent default from heavy loans by suspending huge army of ministers, advisors, special assistants, chairman committees, grade 21 and above post increased 7 times, retired grade 21 and above, judges and other over 181 parliamentarian enjoying illegal perks over 15 billion dollars out of the annual loss of over 4 billion dollars. Free utilities bills, free servant, free driver, free patrol, free car, dozen to few dozen vehicles for security beside 3500 percent increase in pension, pays, perks of ex presesidents, CMs, and others including above must be stopped Asp, maximum pays, pensions must be fixed lower than 0.5 million including perks 1. Economic Revival Emergency Council EREC is required to protect vanishing economy 97 percent destroyed and to prevent default from heavy loans as interim government for 2 years by refredum. 18th amendment has destroyed all most every thing causing loss of over 50 billion dollars per year, it require revision. Pakistan can earn over 40 million dollars from tourism though 18th amendment has destroyed sports, culture, tourism, youth affair by making over 2 dozen ministries and divisions spending over Rs 6 billions instead of one ministry spending Over Rs 5 millions, it requires revision 3. Over 60 percent reduction in the nondevelopment expences is urgently required by restuructingb& abolishing unnecessary divisions, ministries & prgnizayions 4. Pakistan has great potential of investments in many sectors. Over 7.5 trillions dollars in 7 countries by over 145 blsvkmoney holders have golden chance to invest through the friends of Pakistan forum. 5. Technical & professional workforce having skills and experience including 3 year last service in armed forces must be given certificates & degrees using open university programs and technical institutions, they must be helped for foreign jobs. Our embassies abroad must find scholarships for our students. 6. Smuggling of dollars must be stopped Asp, new registration in dollars of property dealealers, cable operators, foreigners. Firms must be staryef 7. Pakistan has suffered losses of over 18 billion dollars in war against terrorism and NATO supports though losses much more, scarb from Afghanistan was not given, Armed forces must get more share in UN peace missions and military grants to meet challenges of new wave of terrorism. 8. Greatest damage caused by floods has
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Sher Khitab Mar 04, 2023 08:33am
Until and unless the corpus of the dog is not brought out of the well, the false and fraud reforms are mere a drama. This country has already pledged it's sovereignty with IMF and as such the most important element of State is missing. We don't need any defence.
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Fawad Mar 04, 2023 08:45am
Bhai fauj k plots ka aur maraat ka Kuch karo
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Tariq Khattak Mar 04, 2023 04:09pm
Please bring legislation to increase minimum wage of office work staff at least 40000/-
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Owais Mar 04, 2023 06:41pm
Reduce defence budget by 20%.
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Tulukan Mairandi Mar 04, 2023 11:33pm
Iron brother China, with whom relations are deeper than ocean and sweeter than honey must: 1. Forgive all loans and give $20 bn more without tieing to IMF 2. Compensate us for losses caused by Chinavirus (Covid 19) 3. Pay Liquidated Damages for CPEC delays 4. Pay losses for ecological and social damages caused by CPEC and chinese pollution that caused floods 5. Pay compensation for low quality chinavirus (Covid 19) vaccine, tanks, trains, drones and ships.
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Aqiq Hussain Mar 04, 2023 11:33pm
Please don't disturb those , who are alive on salaries and pension. All promotional works be stopped. Give facilities to the farmers. Try to run the factories. 3 layer checking be placed at Pak-Afghan border. Prevent smuggling. Increase export. Give facilities to tax payers. Give facilities to Pakistanis living abroad. Give facilities to foreigners. Stop import related to luxurious items. Taken loans from Pakistanis billioners and millionaire. Import patrol and deiesl from Iran on cheap rates. Take assist and loans from friendly nation. All expenditures and accounts be controlled through digital means. Facilities be given to government hospitals. Stop production of electricity from patrol and deiesl. Generate electricity from solar means. MPA and MNA funds be stopped till the stabilization of the economy. Eridicate corruption of all forms.
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Asim Mar 04, 2023 11:52pm
@Rao Tanveer, 100%true
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Asim Mar 04, 2023 11:52pm
100% true
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parbriz Mar 05, 2023 06:47pm
I enjoy reading through a post that can make men and women think. Also, thank you for allowing for me to comment!
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الطاف عثمانی Mar 05, 2023 07:49pm
If government takes bold decisions upon saleries Nd pension, then goverment will face a large strike by the afectees. On the otherside, no person will join army such as a daily wages soldiwer. A new kata will be open which will never be closed by this foolish setup.
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Nafis Mar 06, 2023 02:25pm
"Few of the ministers had no other source of earnings and relied solely on their salaries" Had this been the case, Pakistan would have been far ahead of Singapore or Scandinavian countries.
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