Renowned economist Dr. Kaiser Bengali has stepped down from the Austerity Committee (High-Powered Committee for Rightsizing the Federal Government), which was formed by Prime Minister Shehbaz Sharif to reduce government expenses.
In his resignation letter, Dr. Kaiser pointed out the lack of government commitment to cutting expenditure. He expressed disappointment in the committee’s recommendation to privatize only 17 commercial entities out of the 70 government organizations reviewed, while retaining 52 government organizations and closing down just one.
During a media briefing at the Karachi Press Club, Dr. Kaiser emphasized that the government’s top priority should be to address the severe financial crisis looming over the economy and the country. He criticized the committee for shifting its focus to improving the efficiency of government entities rather than downsizing them.
Dr. Kaiser also questioned the committee’s suggestion to eliminate 150,000 low-cost positions within the Basic Pay Scale (BPS) 1 to 16 and privatize the Utility Stores Corporation (USC), emphasizing that the burden of “right-sizing” was unfairly falling on the lower-income segments of society without addressing high-cost positions like Secretary, Additional Secretary, Joint Secretary, Director-General, and others.
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He revealed that his detailed report to the committee had recommended abolishing 17 divisions and nearly 50 government organizations, which would have reduced a significant number of BPS 20 to 22 positions and saved over Rs30 billion annually in non-salary costs.
Dr. Kaiser warned that the country’s economy was on the verge of collapse and heavily reliant on debt. He expressed concern that even the International Monetary Fund (IMF) and other friendly countries were hesitant to provide further loans. Additionally, he highlighted that the privatization process had stalled, with no bidders for state-owned enterprises, and foreign investors were pulling out, leading to a reverse Foreign Direct Investment (FDI) trend.
