Prime Minister Shehbaz Sharif has instructed all federal ministries to identify and propose the closure of non-functional government departments in preparation for the upcoming budget. The directive is part of a broader effort to streamline governance and cut unnecessary expenditures.
The Prime Minister also ordered the Finance and Power Ministries to finalize power subsidy allocations before the federal budget is presented on June 2. To resolve outstanding matters, PM Shehbaz formed six specialized committees and set a deadline of May 24 for completion of all budget-related tasks. Finance Minister Muhammad Aurangzeb has been directed to address unresolved issues by Saturday.
A previous effort to downsize the cabinet failed to meet expectations. Now, a federal committee is reassessing all state-owned enterprises to determine their viability. The Cabinet Division recently informed the Senate Finance Committee that abolishing 40,000 posts could save the government Rs. 36.3 billion annually, with Grade-1 eliminations alone yielding Rs. 7 billion in savings.
PM Shehbaz has also instructed the Finance Minister to finalize the main themes of the budget speech and tasked the media wing with developing a positive public narrative.
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He further directed the Planning and Finance Ministries to consult line ministries and include only fully fundable projects in the Public Sector Development Program (PSDP) for 2025–26.
Additionally, the Prime Minister demanded clarity on discretionary spending under the SDGs Achievement Program. While Rs. 50 billion was allocated this year, actual expenditures are believed to exceed that amount.
The Finance and Power Ministries are still negotiating power subsidy allocations. While Rs. 1.04 trillion has been proposed for 2025–26, the Power Division is seeking an additional Rs. 180 billion, to be drawn from the Petroleum Development Levy. Earlier, the levy was increased by Rs. 10/litre to reduce electricity tariffs by Rs. 1.71/unit. The PM has asked for a revised proposal to be finalized.
Lastly, the Petroleum Division has been ordered to resolve ongoing issues related to input tax adjustments for oil refineries.
