Can devolution be a substitute for privatisation?

The austerity measures aimed at saving Rs200 billion annually on current expenditures announced recently by Prime Minister Shahbaz Sharif are seen by many as a symbolic move to reduce the fiscal deficit.

Furthermore, it is unclear whether the move will reduce waste and financial leakages, economise expenditure and improve institutional efficiency. Or will it just be an across-the-board cut?

Salient features of belt-tightening are the sweeping 15 per cent reduction in current expenditure by all federal entities and the withdrawal of salaries, perks, privileges etc, of the federal cabinet and prime minister's advisors and special assistants.

A committee headed by Finance Minister Ishaq Dar monitors the implementation of austerity measures. The principal account officers of every ministry, division and department have been asked to comply with the government's directive fully.

To reduce circular debt, there is a move to hand over the management of Discos to the provinces where operational efficiency and service delivery can be improved

The reduction mode in current expenditure, as well as development spending, needs to be rationalised. When federal development spending is slashed and the execution of affected projects is delayed, the costs often escalate much beyond the original estimates and affect the project's financial viability. Not only that but for one reason or another, some foreign-funded projects are also delayed and result in financial losses.

Then with the country facing foreign debt default risks, it is necessary to accord the top priority to the completion of projects based on indigenous resources such as Thar coal to reduce dependence on a highly erratic, inflation-hit international market.

It is worth noting here that the International Monetary Fund staff has objected to the government and State Bank decision to penalise exporters for delaying export proceeds, says officials. Even corrective measures for the grey forex markets are opposed.

Another area to focus on is mini dams which require smaller investments and can be completed in a shorter span of time to provide irrigation water and electricity at the farmer's doorsteps. It would be in line with the global trend - as the latest research shows - of rising local, regional and home-grown businesses.

The share of imported fuels in the energy mix shot up to 49pc in 2021 from 29pc in 2006. That has made electricity unaffordable for domestic and industrial consumers and...