Austerity drive to save Rs16 billion, 50% cut in official vehicle fuel to yield just Rs700 million, parliamentary committee told

Finance Secretary Imdad Ullah Bosal told a parliamentary committee on Thursday that the new austerity measures could save about Rs16.8 billion. According to Profit by Pakistan Today, a 50% cut in fuel allocations for official vehicles would yield only Rs700 million over the three-month implementation period. A separate 5% reduction in non-salary spending, sustained for one year, is projected to bring in Rs16.1 billion.

The figures emerged during a wider review of how Pakistan is meeting conditions attached to its IMF programme, which Bosal described as pretty strong despite several missed benchmarks. Spending on health and education reached Rs3.1 trillion in the last fiscal year, falling short of a Rs3.47 trillion target, and Bosal attributed the shortfall to some provinces. He also said that the FBR's missed tax collection goals had prompted the federal government to ask provinces to cut spending.

Other conditions remain unfulfilled, including changes to the Sovereign Wealth Fund (SWF) Act, laws for nine state-owned enterprises, the SECP Act and the Companies Act, 2017. Special Secretary Finance Qumar Abbasi said three of the nine SOE laws have been passed, and a proposal would route SWF dividend income to the government first. Bosal also described the response to the fixed tax scheme for traders as very slow and said remedial steps were needed.