Recommendations to be formulated in a week, defense budget, interest payments out of jurisdiction, revision of pension scheme key issues of IMF talks Photo: File
Islamabad: The government has announced the formation of a new committee to cut government expenditure including salaries and pensions.
In the 7-member committee formed under the direction of Prime Minister Shehbaz Sharif, Deputy Chairman Planning Commission Dr. Jahanzeb, Cabinet Division, Treasury and Industry Secretaries will be government representatives while Dr. Qaiser Bengali, Dr. Farrukh Saleem and Naveed Iftikhar will be independent members. The committee’s jurisdiction does not include the defense budget and interest expenditure, which account for two-thirds of the total federal budget.
The committee will consider only 16 per cent expenditure revision, rationalization of expenditure on pension and development, which is unlikely to result in major savings. Dr Qaiser Bengali, a member of the committee, has been raising his voice for a long time in support of eliminating non-military expenditure from the defense budget and closing unnecessary cantonments. According to sources, the prime minister has given a week’s time to the committee to formulate recommendations on cuts in government expenditure, the revision of the pension scheme is a key issue in the review talks with the IMF starting on March 14.
The committee will also examine the reports of all the first committees to reduce the size of the federal government. According to the notification, despite the transfer of powers to the provinces, about half a dozen ministries are still active at the federal level. approved the budget of 73 billion interest payments, 18 billion allocated for defense expenses, 714 billion for civil government, 900 billion for development projects, 801 billion allocated for pension, in which the share of military pension is 563 billion or 70 percent.
The committee is entrusted with the responsibility of making recommendations regarding rationality in development programs and pension schemes, defense and interest payments are not within the jurisdiction of the committee, so its recommendations are unlikely to be meaningful. The Ministry of Finance revised the budget deficit target for interest payments last month and increased it to 85 trillion, the expenditure on interest is currently estimated at 83.33 trillion, while the National Assembly allocated 73 trillion in the budget.
Pakistan needs debt restructuring and the State Bank of India to cut interest rates immediately for a significant reduction in interest costs. In the first seven months of this fiscal year, the government spent 46.6 trillion on interest payments, which is more than the total revenue of the government during that period.
