he International Monetary Fund has long been regarded as a pivotal player in Pakistan’s economic landscape, often stepping in to provide financial assistance during times of crisis. Recent data suggests some success: inflation fell to a historic low of 0.3 percent in April 2025, and a primary surplus of 2.0 percent of GDP was achieved in the first half of FY25.
However, these headline figures conceal a deeper malaise. IMF’s reform agenda, while rigorous on paper, has been unable to address the entrenched structural privileges of Pakistan’s elites.
The typical IMF prescription includes austerity: cutting subsidies, increasing taxes and reducing public expenditure. These steps, while fiscally prudent on paper, disproportionately impact the low-income segments of the society. For instance, the removal of energy subsidies has led to higher electricity tariffs, burdening households already struggling with inflation. The lavish perks enjoyed by senior bureaucrats and influential business tycons remain largely untouched.
A comprehensive study by the Pakistan Institute of Development Economics has shed light on the extent of these privileges. Civil servants in Grades 17 and above receive many benefits in addition to their salaries. These include government maintained housing, official vehicles, fuel allowance and free or subsidised utilities.
These perks significantly inflate the actual cost of maintaining a bureaucrat. For example, the total cost of a Grade 20 officer can be more than double their basic salary.
The cumulative effect of these privileges is staggering. Estimates suggest that the annual expenditure on public servants, including salaries, pensions and perks exceeds Rs 8 trillion (houses, various allowances, pension, gratuity, discount plots, medical care, POL, vehicles and their maintenance, insurance and foreign visits).
The PIDE study revealed that there are more than six dozen kinds of perks and privileges. For instance, the use of official vehicles for personal purposes by Grade 20-22 officers costs more than 1.2 times their basic pay.
Housing perks are another area of concern. Only a small fraction of civil servants reside in government-owned accommodations. A majority receives substantial house rent allowances. In cities like Islamabad, this allowance can be as high as 45 percent of the basic pay.
The monetisation policy, intended to replace in-kind benefits with cash allowances, has not been universally implemented. Many senior officers continue to have government-provided housing and vehicles. In Islamabad alone, 17,471 government houses sit on land worth Rs 1.45 trillion. The official cars for senior officers cost Rs 1.53 billion. These figures underscore the substantial opportunity costs associated with maintaining such privileges.
Had the bureaucracy lived like other citizens, they might have been compelled to upgrade the broken civic infrastructure. Cocooned in official residences and surrounded by comfort, they remain insulated from the common man’s misery.
The allocation of luxury housing for bureaucrats continues. The Punjab government recently approved the construction of 27 luxurious houses at a cost exceeding Rs 1.64 billion. Such expenditures highlight the gulf between the state’s fiscal policies and the lived reality of its citizens.
This privileged class consumes a major share of the national budget. Yet, they continue to demand salary hikes in every budget.
Had the bureaucrats lived like other citizens, they might have been compelled to upgrade the broken civic infrastructure. Cocooned in official residences, chauffeured in government vehicles, guarded by security agencies and surrounded by comfort and serving staff, they remain insulated from the common man’s misery. They neither experience the hardship at public hospitals nor the frustration of failing schools and crowded public transport.
Let us end this privilege. Let us treat them like other Pakistanis. Only then, perhaps, will they design public transport systems they will be willing to use; build schools good enough for their own children; and hospitals they will not mind visiting when needed.
While the IMF mandates reduction of subsidies that directly affect the poor, it remains silent on the extravagant expenditure incurred by the bureaucratic elite. This approach not only perpetuates inequality but also undermines the credibility of the reforms.
If the IMF had a more equitable reform agenda it would make its support conditional on a commitment by the government to curtail the bureaucrat’s privileges. This could start with the monetisation of all in-kind benefits. The savings could then be redirected to health, education and public transportation sectors.
Adequate investment in public transport could alleviate the burden on urban infrastructure and reduce environmental pollution. If government officials were to forgo vehicles and fuel allowances, the state could channel those funds into developing efficient and affordable public transit systems that would benefit the entire population.
If the IMF’s reform agenda included the rationalisation of bureaucratic perks, it could lead to more equitable resource allocation. Redirecting funds from excessive administrative expenses to sectors like education, healthcare and public transport can foster public trust in governmental institutions.
The IMF’s efforts to stabilise Pakistan’s economy are noteworthy. However, a more holistic approach, addressing the structural inefficiencies, is imperative. By advocating for reform of bureaucratic privileges, the IMF can play a pivotal role in promoting social equity and institutional integrity.
The writer is the founder of School of Sociology at Quaid-i-Azam University, Islamabad