Govt aims to reduce spending through right-sizing says Khurram Schehzad

February 07, 2025 (MLN): The government is focusing on cutting down its expenditure by right-sizing said Advisor to Finance Minister Khurram Schehzad.

He expressed these views in a panel discussion organized at the Karachi Literature Festival.

He stated that the budget of the civil government is $3 billion, Rs836bn, according to the press release issued today.

The federal government has 43 ministries with more than 400 departments.

Many ministries have already been devolved to the provinces and will gradually be abolished by the federal government.

Khurram Schehzad stated that government expenditure primarily consists of three or four major components: salaries of civil government officers and employees, pensions, state-owned enterprises (SOEs), and energy-related subsidies.

These collectively amount to Rs3 to Rs4 trillion.

By adopting the right-sizing strategy, the government aims to reduce costs by closing ministries or merging their departments to streamline operations.

Our target of right-sizing is to reduce $1bn out of three billion dollars.

He maintained that the unfilled vacancies are being abolished so that the process of right-sizing does not get affected, till now 150,000 vacancies have been scrapped.

He said that the finance minister is determined that long-term sustainability should be prioritized over short-term relief.

He said that the State Bank has made tremendous efforts to stabilize the rupee devaluation, and economic course corrections are taking place, it will take time but continuity is the key.

Khurram Schehzad said that there are two major issues: transitional and transformational.

Fiscal deficit and current account have to be fixed, revenue has to be increased, while expenditure and taxes need to be reduced.

Transformational issues are related to the education and health sectors which is the sole responsibility of the provinces.

Answering a question, he responded, “When inflation is higher than the growth it leads to poverty, if inflation drops and the growth does not increase, it still is a better situation”.

He added, "The federal government is facing two major challenges; climate change and population growth, and we are making efforts to control them".

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