40,000 posts being axed to save Rs36 billion
The Cabinet Division on Wednesday disclosed that the drive to reduce government expenditures by abolishing posts would save Rs36 billion annually and one-fifth of the savings were ensured by cutting the lowest pay grade-1 posts of gardeners, sweepers and peons.
The Cabinet Division for the first time shared the pay-scale wise details of nearly 40,000 positions that have been abolished or declared as dying posts with the Senate Standing Committee on Finance. PPP’s Senator Saleem Mandviwalla chaired the meeting.
Majority of these positions were already vacant and it will not have any immediate impact on the serving people. However, there will not be new hiring against these positions and contractors of the existing daily-wagers are not further extended.
The Secretary Cabinet Dr Kamran Ali Afzal also conceded that the recent cabinet expansion dented the symbolic value of reducing the expenses but said that in monetary terms the impact was minuscule. The Secretary Finance Imdad Ullah Bosal commented on the quality of the finance ministers of Pakistan during the past over two decades and implications of their decisions on the economy.
The Cabinet Division informed the committee on the government’s right-sizing initiative. The Secretary Cabinet told the Committee that the Prime Minister Shehbaz Sharif had instructed a reduction in the size of the federal government to improve efficiency and prioritize core responsibilities. He said that institutional reforms had also been initiated as part of this directive.
The joint secretary cabinet shared the scale-wise details of abolishing and declaring dying positions of 39,896 posts in the public sector. Out of these 11,558 positions that were either abolished or declared dying belonged to Pakistan’s lowest pay scale 1. This is equal to 29% of the total positions that are being abolished. The average salary of pay scale one is Rs42,888 and peons, gardeners and sweepers are recruited in this scale.
The committee was informed that abolishing all these nearly 40,000 positions would save annually Rs36.3 billion. But 19% or Rs7 billion savings were against the lowest pay scale 1.
Compared to grade-1, only two positions of the highest pay scale of 22 with monthly average salary of Rs769,319 have been abolished, the committee was informed. Abolishing two positions of grade-22 will annually save Rs20.8 million or 0.05% of the total savings.
The decision to end these positions had been taken by the government in August last year and the information was updated till 18th of February. Due to political reasons, the successive governments have been inducting people in the government sector mostly in these low pay scales, which bloated the size and put undue burden on the exchequer.
The government has so far abolished only two positions of grade 21, which is the second highest grade, which will save another Rs18 million. In scale 2, the second lowest pay scale, about 3400 positions have been abolished to save Rs2 billion.
In total, the grade-1 to 16’s 38692 positions have been abolished that will save Rs31 billion or 86% of the total savings.
Senator Sherry Rehman of the PPP expressed concern over the government’s approach to reforms. Prime Minister Shehbaz Sharif last month more than doubled his cabinet size.
“On one hand, the government talks about cutting costs, yet on the other, it has doubled the size of the federal cabinet,” she stated. Devolution logic has been offset by doubling the size of the cabinet, said Senator Sherry.
The appointment of a new minister results in a minuscule increase in operational expenditures but I concede that there is symbolic value that has been affected, said Secretary Cabinet Kamran Ali Afzal.
The Cabinet Secretary stated that the induction of new ministers is expected to enhance the overall performance of ministries, in line with the broader agenda of institutional reform. He said that one minister was heading more than one department that was affecting efficiency and required an expansion.
“The primary goal is for the federal government to focus on its essential functions, while transferring additional responsibilities to the provinces,” the Secretary of the Cabinet Division explained.
The committee members objected to retaining ministries such as health and education, which are provincial subjects under the constitution. However, the right sizing committee has recommended closing many departments of such ministries.
Senator Mohsin Aziz remarked about the quality of the federal secretaries heading various technical ministries.
There is a misconception of specialization. In universities and hospitals the specialized heads have created havoc, said Secretary Finance Imdad Ullah Bosal –a top ranking Pakistan Administrative Service officer considered to be close to the Prime Minister.
“There have been technical finance ministers during the past over 25 years and you can see the state of the economy”, remarked Bosal while differing to the idea of appointing specialized people as heads of the Divisions.
During the past over two decades bankers, chartered accountants and economists have mostly remained the finance ministers. Among them are Shaukat Aziz, Ishaq Dar (three-time), Shaukat Tarin (two-time) Miftah Ismail, Asad Umar, Syed Naveed Qamar, Saleem Mandviwalla and the incumbent Muhammad Aurangzeb. Naveed Qamar, Asad Umar, Miftah Ismail and Mandviwalla remained the finance ministers for a brief period.
The committee decided to review the right-sizing of the ministries thoroughly and department-wise, and to discuss it further in the next meeting.