Pakistan Takes Cost-Cutting Measures To Address Financial Emergency: Report

Pakistan has resorted to taking some desperate cost-cutting measures as the country continues to face a "financial emergency". The measures include rationing of fuel for government vehicles, restrictions on official travel, stopping leave encashments, medical bill payments and removing allowances among others.

Pakistani cabinet Secretariat in a recent notification said, "In view of the principal approval by the Prime Minister of Pakistan and present financial calamity of the state and the severe shortage of funds, it has become imperative to issue the following instructions, otherwise further financial catastrophe may lead to a situation of stoppage of salaries in public/autonomous organizations,"

The measures taken in view of the financial emergency include that all government vehicles used by officers (entitled) should not be given over 120 litres of fuel per month. Employees travelling out of town, city or village on official work should be given two DAs according to their grade and reduced by one DA. Leave encashment of all regular employees of Grade 17-21 should be stopped immediately.

The measures include regulating the financial hardship by removing all allowances of more than 25 per cent from the salaries of government employees immedicately. It also called for avoiding paying any medical bills to employees which are between Grade 11 to 21 until the country's "financial woes subside." The cabinet secretariat said that the salaries of employees from grade 11 to 21 should not be increased until "financial hitches are reduced."

The measures called for the stoppage of giving study leave with salary. It called for implementing the policy of taking full work from employees with fewer financial resources. A policy regarding the pension of all permanent employees from Grades 7 to 21 will be issued. All permanent employees from Grades 7 to 21 should be given annual increments based on their performance.

In case of violation of rules, employees should be punished with a deduction of 50% salary. Furthermore, the ban should be imposed on giving bonuses to government employees. All government bodies shall submit absolute reports on the utilization of funds to enable better utilization of money. Government bodies and institutions need to create an eight-hour workload policy for their staff.

Organizations and institutions should take action against government employees who are found negligent and reckless in their work. It stated that the instructions must be followed to avoid any uncertainty in the future. Notably, Pakistan is under the Extended Fund Facility (EFF) of the International Monetary Fund (IMF), according to The Express Tribune report. However, the country is still facing a shortage of dollars. Pakistan is facing domestic and international political economy challenges.

Pakistan's economy has been facing structural inflation where the average customer price index is currently around 25 per cent, The Express Tribune reported. The devaluation of the rupee has also played a key part in the increase of prices in Pakistan.

The average Sensitive Price Index (SPI) is around 28% in the first five months of FY 23. Amid the current economic situation, the Pakistani Cabinet Secretariat has taken measures to address the "financial emergency" of the country. In a notification issued on December 20, the Cabinet Secretariat called for following instructions amid the present "financial calamity of the state" and shortage of funds.

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