Pakistan Cuts 1.5 Lakh Jobs, Shuts Six Ministries to Secure IMF Loan
In a bid to meet the stringent conditions set by the International Monetary Fund (IMF) for a $7 billion loan package, Pakistan has announced drastic measures, including cutting 1.5 lakh government jobs, shutting down six ministries, and merging two others. The decision, aimed at reducing administrative expenditures, was reported by PTI on Sunday, September 29.
IMF Loan Agreement and Economic Reforms
The IMF approved the assistance package on September 26, releasing $1 billion as the first tranche. The loan deal requires Pakistan to implement several fiscal reforms, including reducing expenditures, increasing the tax-to-GDP ratio, taxing non-traditional sectors like agriculture and real estate, limiting subsidies, and transferring some fiscal responsibilities to provinces.
Finance Minister Muhammad Aurangzeb, upon his return from the United States, stated that a final program with the IMF has been agreed upon, which he believes will be Pakistan’s last. “We need to implement our policies to prove that it will be the last programme,” Aurangzeb noted, emphasizing the need for economic formalization to align with G20 standards.
Job Cuts and Ministry Restructuring
As part of the IMF conditions, the government has initiated right-sizing within various ministries. The closure of six ministries is set to be implemented soon, with another two being merged. “Additionally, 150,000 posts across various ministries will be eliminated,” stated Aurangzeb. This move is part of a broader strategy to streamline governmental functions and reduce the financial burden on the state.
The Minister further highlighted the increase in taxpayer numbers, with 3 lakh new taxpayers added last year and 7.32 lakh new registrations so far this year, bringing the total to 3.2 million. This marks a significant jump from the 1.6 million taxpayers recorded previously.
These measures reflect Pakistan’s commitment to revamping its economic structure as it navigates through the ongoing financial crisis with IMF support.
