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Monday July 15, 2024

Shehbaz govt playing ‘committee, committee’ on much-needed austerity measures

Finance minister in his budget speech did not announce any austerity measures

By Ansar Abbasi
June 13, 2024
Prime Minister Shehbaz Sharif attends SCO head of states meeting in Samarkand, Uzbekistan on September 16, 2022. — PM Office
Prime Minister Shehbaz Sharif attends SCO head of states meeting in Samarkand, Uzbekistan on September 16, 2022. — PM Office

ISLAMABAD: Shehbaz Sharif government has once again shied away from its own belt tightening measures, which were expected to be announced in the budget speech. Now a new committee is being constituted instead of approving for implementation recommendations of its last two committees constituted to recommend austerity measures.

The finance minister in his budget speech did not announce any austerity measures, which were recommended by a high-level committee that was set up by the prime minister during the first few weeks of his present tenure. Instead, he talked about new considerations for right-sizing of the government for which, sources said, a new committee is being set up.

Sources said that in the pre-budget discussions, it was decided to have a detailed look at the recommendations given by the last committee headed by deputy chairman Planning Commission.

Interestingly, the last committee was also constituted to propose a practical plan for reduction in government expenditures on the basis of what a previous committee, which was set up by Shehbaz Sharif during his last tenure (PDM government), had recommended.

When a cabinet source was approached by this correspondent to inquire about the reason as to why the austerity measures recommended by the committee headed by deputy chairman Planning Commission are not part of the budget speech, he said, “A new committee will finalise more detailed recommendations and will propose downsizing of the government.”

The government has not yet notified the new committee but the source insisted that the new committee will include most of the members of the last committee.

A high-level committee set up by Prime Minister Shehbaz Sharif during his last tenure as PM had recommended a comprehensive set of austerity measures to save up to Rs1 trillion per year in the medium term but most of its recommendations were ignored.

The committee, which was headed by a reputed retired bureaucrat Nasir Mahmood Khosa, had 15 members. Later, the prime minister, during the initial few weeks of his present tenure, constituted a seven-member committee to present a practical plan for reduction in government expenditures. Interestingly, most of the seven-member committee fellows were part of the austerity committee (which was set up during PDM govt’s tenure) whose most recommendations were ignored. The last committee was headed by deputy chairman Planning and included secretary Finance, secretary Cabinet Division, secretary Industries and Production Rashid Mahmood Langrial, Kaiser Bengali, Dr Farrukh Saleem and Muhammad Naveed Iftikhar.

The previous committee, which had presented its report in early 2023 to the then Shehbaz-led PDM government, not only included secretary finance, secretary cabinet, Dr Kaiser Bengali, Dr Farrukh Saleem and Muhammad Naveed Iftikhar but was also far more powerful. This was because besides others, it also included the then minister of state for finance, SAPM on finance, SAPM on government effectiveness, Adviser to PM on establishment and all chief secretaries.

The 2023 committee had recommended comprehensive austerity measures, which as per the committee’s recommendations, if implemented, were to affect the savings of Rs200 billion in subsidies, Rs200 billion from development side, Rs55 billion from running of civil government, Rs60-70 billion via Single Treasury Account, Rs100 billion from conservation measures, Rs174 billion from divestment of non-strategic SOEs and savings from 15 percent cut in non-combat defence expenditure.