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Restructuring the government departments

What is, necessary is that the process of reorganization or restructuring should be carried out expeditiously in order to avoid uncertainty

 June 11 - 17, 2001

The Chief Executive, General Pervez Musharraf last week, finally approved for immediate implementation the report of the committee on restructuring and rightsizing (CRR) which has recommended slashing the civilian bureaucratic strength of the federal government by over 46000 employees by the end of year of 2002-2003 in two phases, winging up of nine, privatization of 14 and provincialising six departments of the federal government.

The approval was given by the cabinet meeting chaired by General Pervez Musharraf, after the final briefing given by the Deputy Chairman Planning Commission who headed the CCR. The meeting, however, decided that no retrenchment would be made in the ministries and divisions and after the rightsizing and restructuring exercise the staff would be placed in the surplus pool of the Establishment Division, said the Secretary CRR and Chief Economist, Dr. Pervez Tahir, while briefing the reporters regarding the decisions of the meeting. The surplus staff would be given three options that include retire immediately and also take six months to three years salary in addition to the pension the affected staff would be offered IT training for six months at government expenses to prepare them for future vacancies in BS-12 to 16 and higher levels; non sanctioned positions would continue till the normal retirement, retirements on attaining 25 years of service and voluntary exits, he said.

The Management Services wing of the Cabinet Division has been given under the administrative control of Establishment Division to look after the pool and the posting of the surplus employees to various other ministries and divisions after the required training.

The officers-staff ratio would be reduced from the existing 1: 4.5 too 1:3.2 from the next fiscal year, which would be further reduced to 1:2.5 from July 2002 by enhancing computer skills by the year 2002-03. The reduction would be made in the lower staff BS 1 to 16, which is 90 per cent of the total strength, he added.

He said that the holding corporations of the ministry of Industries and Production, like NFC, State Engineering Corporation of Pakistan, State Cement and Pakistan Automobile Corporation would be privatized/wound up and the PIDC would perform their functions for the time being. The meeting approved the winding up of various organizations, privatization and transfer of some of them to the provinces.

The Committee on Restructuring and Rightsizing (CRR) had proposed the merger of various divisions and reduction of their number from 35 to 21, but the matter was deferred due to the difference of opinion, he added. According to the sources in the Planning Commission, the meeting has approved almost 90 per cent recommendations of the CRR.

Sources said that the meeting approved the privatization of Pakistan Automobile Corporation, PIDC, State Engineering Corporation, National Fertiliser Corporation, Utility Stores Corporation, Pakistan Oilseed Development Board, Pakistan Tourism Development Corporation Hotels, Malam Jabba Resort Limited, Pakistan Institute of Tourism and Hotel Management, National Film Development Corporation, Government Shipping Office, five community centers and holiday homes working under the Establishment Division because they have outlived their utility.

It has been decided that the department of Tourist Services, Pakistan Literacy Commission, National Commission for UNESCO, Academy of Educational Planning, Central Claims Organization of the finance division, National Training Bureau, Employment Exchange Gilgit, Government Shipping Office and Fertiliser Import Department should be wound up, while the Pakistan Tobacco Board, all federal educational and research institutions located in the provinces, 10 Centres of Excellence, six Area Study Centres, six Pakistan Study Centres, five Women Study Centres, Director General Special Education, National Council for Rehabilitation of Disabled, Welfare Project Gilgit are recommended for transfer to the provinces and educational institutions to the universities concerned.

Sources said that the total federal divisions are 35 and the CRR reviewed 30 of them, with the exception of Defence and Defence Production divisions, Foreign Affairs and Revenue Division which have their own independent restructuring and rightsizing committees.

The existing strength of the 30 federal divisions is 11,174 and is proposed to be reduced by the CRR in the first phase till July 2001-02 to 8,436 and in 2002-03 to 7,088, which is 37 per cent of the total strength. The total strength of the attached departments is 281,623, and is proposed to be reduced to 262,777 in 2001-03, which is 9 per cent of the total. The existing total strength of the autonomous bodies is 90,304 and would be reduced to 67,175 in 2001-03, which is 25 per cent of the total existing strength. The existing estimated expenditures for the year 2000-01 of the annual salaries and allowances of the federal divisions, attached departments and autonomous bodies are Rs.18.107 billion and are proposed to be reduced to Rs.15,492 billion by the year 2002-03. This reduction is 14 per cent of the salaries related budget.

The existing salary related expenditures of the 30 federal divisions are Rs. 953 million and proposed to be reduced to Rs. 718 million in 2001-02 and Rs.619 by the year 2002-03. This showed a saving of 35 per cent in the current expenditures. The total expenditures of the attached departments are more than Rs.11.212 billion and are planned to be reduced to Rs.10.315 billion in 2001-03, while the salaries budget of Rs.5.942 billion of the autonomous bodies is proposed to be reduced to Rs.4.558 billion by the year 2001-03, showing a decrease of 23 per cent after the rightsizing of the employees. Sources added there is a nominal reduction of 362 officers in this total reduction, the actual reduction of officers is likely to be at least 500 officers, at least 137 would be in the Federal Secretariat and 363 in the attached departments and autonomous bodies.

Sources revealed that more tham Rs 20 billion were required to implement the CRR recommendations. The government is seeking about Rs 20 billion from international donor agencies to implement its massive retrenchment plans. Negotiations have already begun with international donors to seek around US$400 million to offer golden handshake (GHS) and early retirement benefit (ERB)schemes to the already identified redundant staff under its rightsizing exercise, sources said. The estimated Rs20 billion calculated by the authorities would not only cater to already identified 40,000 federal employees but would also cover the future slashing of bureaucracy.

The government's anxiety to implement the IMF conditionalities is understandable in view of its desperate bid to qualify for soft loans being sought for the implementation of its reform agenda including revival of the national economy. It is true that the Ministries, Divisions, Corporations etc. are overstaffed due to unscrupulous inductions by the political governments, who had created posts to reward their workers, favourites and cronies. It is also a fact that the state machinery was oversized as compared to the country's legitimate administrative needs. The committee's recommendations to reduce the size of the administrative machinery is, therefore, quite appropriate. The Chief Executive's categorical announcement that no surplus civil servant will be rendered jobless is, however, welcome, because there are already hundreds of thousands unemployed educated youth struggling for employment to earn their subsistence. It would be neither advisable nor judicious to create unemployment for more educated people. What is, however, necessary is that the process of reorganization or restructuring of the state machinery should be carried out expeditiously, in order to avoid uncertainty in the minds of the civil servant. It could not be ignored that a government's credibility remains at stake during the tendency of its decisions implementation. Since the present government is confronted with multifarious problems at home and abroad, it cannot afford any further erosion of its credibility. It is, therefore, desirable that finalization of the plan should be completed swiftly and the restructuring is completed expeditiously to avoid state of uncertainty.