40,000 posts being axed to save Rs36 billion

The Cabinet Division, for the first time, shared pay scale-wise details of nearly 40,000 positions that had been abolished or declared as dying posts with the Senate Standing Committee on Finance. PPP Senator Saleem Mandviwalla chaired the meeting. A majority of these positions were already vacant and it would not have any immediate impact on the people already serving. However, there will not be new hiring on these positions and the contracts of the existing daily-wagers will not be further extended.

Cabinet Secretary Dr Kamran Ali Afzal admitted that the recent cabinet expansion dented the symbolic value of reducing the expenses but said that in monetary terms the impact was minuscule. Finance Secretary Imdadullah Bosal commented on the implications of decisions of finance ministers for the economy over the past two decades.

The Cabinet Division informed the committee about the government’s rightsizing initiative. The cabinet secretary said that Prime Minister Shehbaz Sharif had instructed the reduction in the size of the federal government to improve efficiency and prioritise core responsibilities. He said that institutional reforms had also been initiated as part of the directive.

 

The joint cabinet secretary shared scale-wise details of 39,896 posts in the public sector, which were abolished or declared as dying. Of these, 11,558 positions, which were either abolished or declared as dying, belonged to the lowest pay scale-1. It was equal to 29% of the positions being abolished. The average salary of pay scale-1 is Rs42,888 and peons, gardeners and sweepers are recruited in this scale. The committee was informed that the abolition of nearly 40,000 positions would save Rs36.3 billion annually. However, 19% or Rs7 billion in savings were against the lowest pay scale-1.

Compared to grade-1, only two positions from the highest pay scale-22 with monthly average salary of Rs769,319 had been abolished, the committee was informed. The scrapping of two positions of grade-22 will annually save Rs20.8 million, or 0.05% of the total savings. The decision to end those positions had been taken by the government in August last year and the information was updated till February 18. Due to political reasons, successive governments have been inducting people in the public sector, mostly in low pay scales.

The government has so far abolished only two positions of grade-21, which is the second highest grade, which will save Rs18 million. In scale-2, the second lowest pay scale, about 3,400 positions have been abolished to save Rs2 billion. From grade-1 to 16, a total of 38,692 positions have been abolished that will save Rs31 billion, or 86% of the total savings.

Senator Sherry Rehman of PPP expressed concern over the government’s approach to reforms. PM Sharif last month more than doubled the size of his cabinet. “On the one hand, the government talks about cutting costs, while on the other hand, it has doubled the size of the federal cabinet,” she stated. The devolution logic had been offset by doubling the size of the cabinet, said Rehman.

The appointment of a new minister results in a minuscule increase in operational expenditures, “but I concede that there is a symbolic value that is affected,” said Cabinet Secretary Kamran Ali Afzal. He stated that the induction of new ministers was expected to enhance the overall performance of ministries, in line with the broader agenda of institutional reforms. He pointed out that one minister was heading more than one department, which was affecting the efficiency and required expansion.

“The primary goal is for the federal government to focus on its essential functions, while transferring additional responsibilities to provinces,” explained the cabinet secretary. Committee members objected to retaining the ministries such as health and education, which were provincial subjects under the constitution. However, the rightsizing committee has recommended the closure of many departments of such ministries. Senator Mohsin Aziz spoke about the quality of federal secretaries heading various technical ministries.