Pakistan’s Finance Minister Muhammad Aurangzeb announced on Tuesday that the federal government plans to cut the number of affiliated agencies by half, resulting in the elimination of 150,000 jobs, as part of a comprehensive cost-cutting and efficiency initiative. Speaking at a press conference, Aurangzeb stated, “We are gradually reducing the federal government’s size. So far, 80 departments have been consolidated into 40,” with the reforms expected to be completed by June 2025.
Aurangzeb highlighted that 60% of vacant positions, amounting to 150,000 jobs, have been abolished as a part of cost-cutting. This downsizing is part of a broader restructuring plan initiated in mid-2024 under a committee led by Prime Minister Shehbaz Sharif, aimed at rationalizing expenditures and enhancing performance.
The committee reviewed 43 ministries and their subordinate agencies, with an annual expenditure of Rs900 billion. Initially, six ministries were targeted for right-sizing: Kashmir Affairs and Gilgit-Baltistan, States and Frontier Regions (SAFRON), IT and Telecom, Industries and Reproduction, National Health Services, and Capital Development Authority (CAD). The Ministry of Kashmir Affairs, Gilgit-Baltistan, and SAFRON are being merged, while CAD will be abolished.
In the second phase, 25 out of 60 institutions under the Ministry of Science and Technology, Commerce Division, Housing and Works, and National Food Security Research will be abolished, 20 will be downsized, and nine will be merged. The third phase will focus on the ministries of Federal Education and Professional Training, Information and Broadcasting, Power Division, Finance Division, and National Heritage and Culture.
Aurangzeb noted that the gradual approach was necessary for effective implementation, as attempting to overhaul everything at once was impractical. Additionally, the government plans to transfer hospitals to provincial administrations to improve efficiency.
He emphasized a shift towards an export-driven economic framework, supported by digitalization and technology initiatives, with a new technology program set to be inaugurated in Karachi by the Prime Minister.
Aurangzeb also pointed out that the government’s focus on macroeconomic stability has led to improved key indicators, positioning Pakistan at a promising economic juncture. The size of the government came under scrutiny following a sharp increase in expenditures, prompting steps to reduce size and expenses, including the abolition of the traditional pension system and reduced benefits for current employees.
