PM Shehbaz Orders Closure of Useless Govt Departments Ahead of Budget 2025–26
Islamabad – Prime Minister Shehbaz Sharif has instructed all federal ministries to identify and propose the closure of non-functional government departments as part of budget preparations for FY2025–26. The directive is aimed at streamlining governance and reducing fiscal burden.
The PM has formed six committees to resolve outstanding issues and set a May 24 deadline to complete all budget-related tasks. Finance Minister Muhammad Aurangzeb has been specifically tasked with resolving pending matters by Saturday.
As part of this reform initiative:
- A previous attempt at cabinet rightsizing fell short, prompting a fresh assessment of State-Owned Enterprises (SOEs).
- The Cabinet Division recently told the Senate Finance Committee that abolishing 40,000 government posts could yield Rs. 36.3 billion in annual savings, with Grade-1 positions alone saving Rs. 7 billion.
The Finance and Power Ministries have also been directed to finalize power subsidy allocations before the June 2 budget announcement. A Rs. 1.04 trillion subsidy is under discussion, though the Power Division seeks an additional Rs. 180 billion from the Petroleum Development Levy.
Additionally:
- The PM ordered the inclusion of only fully fundable projects in the 2025–26 Public Sector Development Program (PSDP).
- Ministries must consult with Planning and Finance before project inclusion.
- Clarity is being sought on discretionary spending under the SDGs Achievement Program, which has an allocation of Rs. 50 billion this year.
To address energy sector concerns, the Petroleum Division has been told to resolve input tax adjustment issues for refineries. Meanwhile, the media wing has been instructed to develop a positive public narrative around the budget.
