ISLAMABAD: The caretaker government is considering slashing the expenditures by Rs1.9 trillion as part of an austerity measure including banning new posts, purchasing security vehicles, slashing down allocation for development, devolving the Higher Education Commission (HEC), and cost-sharing of BISP with the provinces.
It has also been decided to implement the ambitious plan by making a Single Treasury Account (TSA) and asking the federal ministries and attached departments to shift the money into the federal government account in order to save up to Rs424 billion.
It has been calculated that 10 percent of the expenditures incurred on running the federal government in FY22 could save Rs54 billion as worked out by the World Bank. It has also been decided to reduce the operational spending on devolved ministries in order to save up to Rs328 billion for the whole financial year 2023-24. In the aftermath of 18th Amendment, different subjects were transferred to the provinces but the Center continued spending, causing loses to the national exchequer.
A detailed working of the government considered by the high-profile Cabinet Committee on Economic Revival (CCER) so far proposed certain austerity measures in order to cut down the expenditures by up to Rs1.9 trillion on short-term basis. But it is yet to be seen if these measures will be implemented in letter and spirit. It recommended that the federal and provincial governments both take austerity measures in order to reduce the expenditures by Rs54 billion for six months such as slapping ban on new posts, hiring of daily wages/other staff, ban on purchasing new vehicles including from project funding, ban on purchase of machinery and equipment except medical, ban on travel abroad including official visits, medical treatment, cabinet members to forego pay and government vehicles and security vehicles to be withdrawn.
The much ambitious plan also envisages that the triage of 14 loss making entities will potentially save Rs458 billion for the whole financial year. The reduced operational spending on devolved ministries is going to save up to Rs328 billion during the current financial year.
The Ministry of Finance has estimated that the devolution of HEC to the provinces would save Rs70 billion per annum. Education had become a provincial subject in the aftermath of 18th Amendment but the Center continued with the HEC at the federal level. The caretaker regime has placed it as an agenda to devolve the HEC to the provinces so it is yet to see how much they are going to succeed on this front. The caretaker government is also considering implementing the cost sharing mechanism of BISP program with the provinces in order to save Rs217 billion on annual basis.
The federal government is also considering re-focusing of the Public Sector Development Program (PSDP) spending only on the federally mandated projects which could save Rs315 billion annually. Caretaker Minister for Finance Dr Shamshad Akhtar had already directed minister for planning to work out details of projects of provincial nature for their removal from the list of PSDP in order to cut down the expenditures by Rs315 billion for the current fiscal year.The last PDM-led regime had allocated Rs950 billion for the PSDP in budget 2023-24.