The federal government has embarked on a significant rightsizing initiative, deciding to shut down 33 State-Owned Entities (SOEs), eliminate 60% of vacant regulatory positions (approximately 150,000 posts), outsource non-core services, and streamline six ministries as part of the first phase of the plan
On August 27, 2024, the Cabinet Division noted that Prime Minister had established a “Committee on the Rightsizing of the Federal Government” through a notification issued on June 21, 2024. The committee was tasked with evaluating which federal government functions could be shifted to the private sector, determining provincial responsibilities, and developing a detailed roadmap for rightsizing. This included safeguarding assets, human resources, and addressing any associated legal concerns.
The six ministries initially targeted for rightsizing are:
- Capital Administration & Development
- Industries & Production
- Information Technology & Telecommunication
- Kashmir Affairs & Gilgit-Baltistan
- National Health Services, Regulations & Coordination
- States & Frontier Regions
The committee engaged with stakeholders from various ministries and conducted a thorough analysis of the financial, institutional, and human resource impacts of the proposed changes. International best practices were considered, and input from the World Bank’s consultants was also incorporated.
On August 16, 2024, the committee presented its findings to the Prime Minister, who approved the recommendations with some refinements. Key proposals included abolishing 60% of vacant positions, outsourcing non-core services like cleaning and gardening, and eliminating temporary contingency posts. A quasi-judicial committee, represented by retired judges, is to be formed to handle grievances from affected employees. Amendments to the Civil Servants Act, 1973, are also planned.
Out of the 82 entities reviewed, 33 will be closed, privatized, or transferred, while 9 will be merged. In the second phase, additional ministries and departments, such as the Board of Investment, Ministry of Commerce, and National Food Security, will undergo similar evaluations.
The Cabinet has instructed the completion of the implementation plan for Phase-1 within two weeks, with a committee on Civil Service Reforms to oversee future steps alongside the rightsizing initiative.
