In a bid to reduce administrative costs, Pakistan announced plans on Sunday to eliminate approximately 150,000 government positions, close six ministries, and merge two others, as part of reforms agreed upon with the International Monetary Fund (IMF) under a USD 7 billion loan package, India Today reported.
The IMF had approved the assistance package on September 26, releasing over USD 1 billion as the first installment after Pakistan committed to reducing expenditures, raising the tax-to-GDP ratio, taxing non-traditional sectors like agriculture and real estate, limiting subsidies, and transferring fiscal responsibilities to the provinces.
Finance Minister Muhammad Aurangzeb explained that the programme with the IMF would be Pakistan’s last, stressing the need for policy implementation to prove the country’s commitment, especially as it seeks to join the G20.
As part of the reforms, the government is right-sizing ministries, with six ministries set to close and two others to merge, while 150,000 government posts will be eliminated.
Aurangzeb also highlighted the government’s focus on boosting tax revenues, noting a significant rise in taxpayers, with 732,000 new taxpayers this year, compared to 300,000 last year. Non-filers will no longer be able to purchase property or vehicles, further incentivizing compliance.
The minister expressed optimism about Pakistan’s economic direction, citing growth in foreign exchange reserves, national exports, and IT exports, as well as reduced inflation. Pakistan’s foreign exchange reserves are at their highest, and the policy rate has been cut by 4.5% since the current government took office.
