Shehbaz Government’s Austerity Package Faces Criticism For Shielding The Wealthy

ISLAMABAD: Shehbaz Sharif Government has introduced no substantive measure to put the burder of impending economic and financial crisis on the disproportionately rich and elites of the society, while there exists a general consensus among the economists that “steep hikes in fuel prices and resulting inflation will strongly impact the low-income and salaried classes.

Early this week Prime Minister Shehbaz Sharif’s announced a package of austerity measures, most to address regional economic instability, as the country’s economy is expected to face significant financial crisis. The Prime Minister’s package of austerity measures is facing lot of structural critiques from economists and analysts.

There is a widespread concern among development and economic experts that the government policy of cutting development budgets to reduce fiscal deficits could lead to a contraction in GDP growth, which will potentially increase poverty and job losses.

Some of the economists have pointed out that the government proposed measures like a four-day workweek or school closures are seen as “temporary patches” that disrupt daily life and productivity without resolving underlying energy policies or import dependencies. Experts have, instead, proposed that instead of cutting public sector expenditures, the government should introduce a robust wealth tax to generate more sustainable revenue from the elite.

It appears that Pakistan’s government is highly bent upon putting the burden of impending financial difficulties that the country would face because of military situation in the Persian Gulf on the poor segments 0f the society, while providing cushions to the rich and privileged.

Most of the government measures are cosmetic in nature which are unlikely to make a substantial contribution to the shoring up of state finances in case military crisis in the Persian Gulf lingers on.

Experts say that the steps like cabinet forgoing salaries for 2 months; 25%–50% cuts for MPs; 2-day pay cut for Grade-20+ officers are nothing by Public relations exercises on the part of government and bureaucracy.

The government also intends to introduce Fuel & Energy 50% cut in official fuel quotas; 60% of govt vehicles grounded; 4-day workweek (excluding banks).

20% reduction in all department expenditures; ban on buying vehicles, ACs, and furniture until June 2026. Ban on foreign tours for ministers; total ban on official dinners/Iftars; meetings moved online.

The government austerity measures package is triggered by global oil prices surging above $100 per barrel due to regional conflicts, which threatened Pakistan’s already fragile fiscal stability and exacerbated its dependence on imported energy.

The non-expert political opponents of the government are also accusing the Prime Minister Shehbaz Sharif and his family to work under influence of business and financial cartels that draw disproportionate support from the government in their bid to loot and plunder the economy and hurt the interests of poor segments of the society.

Opposition parties criticize the Sharif government for being under the influence of Prime Minister’s family’s business interests which has ownership of multiple sugar mills (e.g., Ramzan Sugar Mills) as a fundamental conflict of interest.

Estimates suggest that nearly 50% of Pakistan’s sugar mills are owned by politicians or their close affiliates. In July 2025, accusations surfaced that the government allowed sugar exports of over 765,000 metric tons, which allegedly led to domestic shortages and caused prices to surge from Rs 140 to Rs 190–200 per kilogram.