The federal government has banned new recruitments in federal institutions, availing medical treatment abroad at the state’s expense, and purchasing all types of new vehicles.

In a notification, the finance ministry announced that all positions that have remained vacant for three years have been abolished. “No new hiring will occur except for temporary positions that have lasted over a year.”

This comes amid criticism from several quarters over the government’s steps to cut the expenditure. The South Asian country seeks a $7 billion bailout package from the International Monetary Fund to improve the economy.

Pakistan and the IMF reached an agreement on the 37-month loan programme in July. The IMF said the programme was subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.

Last month, renowned economist Dr Kaiser Bengali resigned from all his official positions after being “disillusioned” by government policies. He criticised the government’s approach to cost-cutting, stating that it was laying off lower-level employees instead of officers.

In a rejoinder, the federal government said Bengali’s statement seemed to be a result of a lack of proper communication or understanding. “All government positions in BS-1 to BS-22 are being rightsized, not just positions in BS-1 to 16. The estimated 60,000 positions that may be rendered surplus as a result of the exercise also include positions in BS-17 to BS-22,” it said.

Moreover, a ban has been imposed on foreign trips funded by the government and the purchase of any new vehicles, with exceptions made only for ambulances, medical aid vehicles, and buses for educational institutions.

Such measures are being implemented in accordance with the federal cabinet’s decision to reduce government expenditures.

Earlier this month, the Cabinet Committee on Institutional Reforms recommended curtailing 150,000 vacant positions, banning contingency recruitment, and outsourcing non-core services like cleaning, and janitorial work, which would gradually phase out many positions in grades 1 to 16.

The committee’s proposal involved closing 28 institutions across above mentioned five ministries, transferring the privatisation ministry and some other ministries to federal units and merging 12 institutions within such ministries.

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In June, PM Shehbaz ordered the wrapping up of the Pakistan Public Works Department (Pak PWD) due to “years’ long poor performance and corruption.” The federal government has vowed to cut expenditures to improve the economy.

Last month, Finance Minister Muhammad Aurangzeb told Reuters that Pakistan is making good progress with the IMF and hopes to get board approval in September for a new loan programme.

“We are making good progress with IMF for Board approval in September,” said Aurangzeb.