Austerity Falls Short as Govt’s Administrative Expenses Continue to Climb

Government spending on civil administration rose sharply in the first quarter of the current fiscal year, climbing to Rs. 161.2 billion even though more than 200,000 posts have been abolished under an aggressive rightsizing drive. Fresh fiscal data shows that the jump in administrative expenses has persisted despite repeated claims of austerity and strict measures introduced since 2021. The Ministry of Finance confirmed a 13 percent rise in the category known as Running of the Civil Government for July to September, reported Dawn. The increase stands out because the government had eliminated more than 150,000 posts last year and recently scrapped another 54,000 vacant positions. The Finance Minister said these cuts were meant to save over Rs. 56 billion annually and were part of a broader restructuring effort. Pension payments have also continued to grow. In the first quarter, the pension bill reached Rs. 249.5 billion, which is a 10 percent increase from Rs. 223 billion in the same period last year. Over the past five years, the pension burden has risen by almost 125 percent, moving up from Rs. 111 billion in the first quarter of FY22. The total pension bill last year was Rs. 911 billion. Official data reveals that the trend of rising costs is not new. Civil administration expenses had already increased by 8 percent in the first quarter of FY25 and had posted a major 29 percent jump in the same period of FY23. Since FY22, spending under this heading has risen by almost 80 percent, starting from Rs. 89.5 billion. The full-year amount had crossed Rs. 892 billion. Subsidy payments exhibited even more pronounced fluctuations, largely because these payments can be deferred and often vary significantly. In the first quarter of this year, subsidies soared sixfold to Rs. 120 billion, compared to Rs. 20 billion in the same period last year. For context, the government had spent only Rs. 2.5 billion on subsidies in the first quarter of FY24. In previous years, payments stood at Rs. 93 billion and Rs. 74 billion. The total subsidy bill for last year climbed to Rs. 1.298 trillion. Although the government has publicly committed to strict austerity, ministries and divisions have continued to find ways around these limits. Even after new measures were announced for FY26, including a ban on vehicle purchases, equipment procurement, and creation of new posts, the rising expenditure pattern has remained unchanged. The data suggests that despite major cuts in staffing and repeated pledges of restraint, the government continues to face steep and growing cost pressures across administration, pensions and subsidies.