Amid economic crisis, Pakistan mulls 10% cut in salaries of govt employees: Reports

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Amid the ongoing economic crisis in Pakistan, the Shehbaz Sharif government is considering different proposals, including slashing the salaries of government employees by 10 per cent across the board. The National Austerity Committee (NAC) constituted by Prime Minister Shehbaz Sharif is also considering cutting down expenditures of ministries/divisions by 15 per cent, reducing the number of federal ministers, ministers of state, and advisers from 78 to 30 only while the remaining should work on a pro bono basis, according to a report by Geo News on Wednesday (January 25).

The recommendations were supposed to be finalised on Wednesday and the NAC would send the report to Sharif. However, there is no update on this development so far. 

The Geo News report said the government was finalising recommendations on austerity as it sought another International Monetary Fund (IMF) tranche, but it was reluctant to implement the conditionalities. This hesitation created a deadlock for the last two and a half months with the IMF.

A report by Dawn on Thursday said that the government has sought support from the United States to unlock the IMF programme that would release $1.1 billion to the economy. In 2019, Pakistan and the IMF signed a $6 billion bailout which was topped by another $1.1 billion last year. However, this came with conditions attached. Citing multiple reports, news agency PTI reported that the Washington-based global lender might not release more funds under the programme until pledges made by the government were met. 

On Wednesday, Pakistan’s Finance Minister Ishaq Dar met a visiting US Treasury delegation, where he said that Islamabad honour its international commitments and was in the process of taking “very tough decisions,” such as increasing the prices of electricity and natural gas according to the Dawn report.

Dar also highlighted that  Pakistan required breathing space as industry and agriculture had passed through the most challenging times after the devastating floods last year, it added. 


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