Various options, including decreasing government employee salaries, are being considered as a newly established committee works on adopting austerity measures to reduce spending, according to sources.

Aside from a 10% pay cut, the 15-member panel is proposing reducing ministry/division spending by 15% and reducing the number of federal ministers, ministers of state, and advisers from 78 to 30, with the remainder working pro bono.

The proposals will be finalized on Wednesday, and the committee will submit a report to Prime Minister Shehbaz Sharif. The delivery of the International Monetary Fund (IMF) tranche prompted the government to embark on austerity, although it remains hesitant to execute conditions that could lead to increased inflation.

Meanwhile, the committee recommends stopping the use of funding for provincial-nature projects and prohibiting public-sector firms from obtaining loans through government guarantees.

However, it is hesitant to take on large expenditure cuts on budgetary resources, such as cutting the number of ministries/divisions after the 18th Amendment, which is the source of overlapping.

It remains to be seen how the NAC will deal with the losses of large public sector organisations such as Pakistan International Airlines (PIA), whose losses this year totalled Rs67 billion, as well as Pakistan Steel Mills, PASSCO, electricity distribution companies, and others. In the previous fiscal year, the power sector alone lost Rs1,600 billion.

The austerity committee also discussed a proposal to freeze intelligence services’ discretionary funds, including Inter-Services Intelligence (ISI) and the Intelligence Bureau (IB). It discussed a proposal to cut defence spending, but the secretary of defence responded that it might not be realistic given increasing inflation and currency devaluation. However, the committee may consider reducing non-combat spending.

The committee also discussed prohibiting the purchase of automobiles, freezing all benefits and privileges both locally and overseas, and lowering the number of redundant posts in various ministries and divisions.

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