Govt Employees Might See Layoffs, 10% Salary Reductions

Govt Employees Might See Layoffs, 10% Salary Reductions
The National Austerity Committee (NAC) constituted by prime minister Shehbaz Sharif is reportedly considering different measures, including cutting down the salaries of government employees by 10%.

The proposals under NAC consideration also include cutting down expenditures of ministries/divisions by up to 15%, and reducing the number of federal ministers, ministers of state, and advisers from 78 to 30, while remaining would work on 'pro bono' basis.

The recommendations would be finalised today (Wednesday) and then the committee will send its report to PM Shehbaz Sharif.

“The NAC is proposing to reduce the number of ministers, ministers of state, advisers and special assistants to PM to 30 only, while the remaining if required, should not enjoy any resources from the national exchequer. They should work on a pro bono basis,” sources confirmed.

The government is finalising recommendations on austerity measures as it is seeking another International Monetary Fund (IMF) tranche, but the government is reluctant to implement the Fund's harsh conditionalities.

This hesitation has created a deadlock for the last two and a half months with the IMF.

The NAC also recommended an end to utilising funds for provincial projects, and imposing a ban on public sector enterprises from secure loans through government guarantees, among others.

However, the NAC is reluctant to take up big ticket items for major expenditure cuts on budgetary resources, such as reducing the number of ministries/divisions after the 18th Amendment, since overlapping ministries/divisions and departments continue to work in confusion.

Several overlapping ministries/divisions are working at the federal level: the centre should restrict their number to five to six only, including defence, foreign affairs, finance, and security, while all other devolved ministries should be abolished.