In order to reduce government spending, the International Monetary Fund (IMF) has encouraged Pakistan to immediately execute right-sizing measures.
The IMF stressed finishing the right-sizing exercise as part of a tangible strategy to close any income gap in the upcoming quarter in a discussion with the Secretary Cabinet, the Ministry of Finance, and the Cabinet Division.
One of the goals of the Federal Board of Revenue’s (FBR) Compliance Risk Management and Risk Improvement Plan is to improve tax compliance. In addition to measures to recover unpaid debts from high-risk cases in Islamabad, Karachi, and Lahore, the IMF delegation was updated on the vast number of retailers in major cities that are still exempt from taxes.
The performance of the oil and electricity industries was also discussed at the review with the Ministry of Energy.
The State Bank of Pakistan (SBP) and the IMF team discussed development funding, the operationalisation of the Bank Resolution Framework, and the transition of the refinance scheme in order to reduce risks in the banking industry.
Read more: Pakistan abolishes 150,000 vacant posts, dissolves 6 ministries for $7 billion IMF deal
A component of the continuing study was the evaluation of the foreign currency market and the external sector.
The rightsizing measures in Pakistan are likely to have several impacts on public services:
- Efficiency Improvements:
By streamlining operations and reducing redundant positions, the government aims to improve the efficiency of public services. This could lead to faster and more effective service delivery.
- Outsourcing Non-Core Services:
The government plans to outsource non-core services such as cleaning, plumbing, and gardening1. This could potentially improve the quality of these services while reducing costs.
- Reduction in Workforce:
The abolition of around 150,000 vacant posts1 might lead to a leaner workforce. While this could improve efficiency, it may also result in increased workloads for remaining employees.
- Mergers and Reductions:
Several ministries and departments will be merged or reduced. This could lead to better coordination and reduced administrative overhead but might also cause temporary disruptions as the changes are implemented.
Overall, while the rightsizing measures aim to reduce costs and improve efficiency, there may be short-term challenges and adjustments required within public services.