Renowned economist Dr Kaiser Bengali declared on Monday that the country is effectively bankrupt and its economy is in free fall.

Dr Kaiser - who resigned from the high-profile committee tasked with institutional reforms - voiced his frustrations at a press conference held in Karachi.

He slated the government for its failure to implement substantial cost-cutting measures and its reluctance to heed the recommendations of previous committees, including those led by economists Hafeez Pasha and Dr Ishrat Hussain.

RELATED: Govt clarifies right-sizing amid resignation of Dr Qaiser Bengali

“When you visit Islamabad, everything appears normal,” he remarked, emphasising the disconnect between official perceptions and ground realities.

He noted that despite the committee's proposal to shut down 70 departments across 53 government institutions, only one institution has been closed.

The economist expressed disappointment over the government’s focus on reducing the number of lower-grade employees while preserving higher-grade officers.

He argued that this approach would have minimal impact on reducing overall expenses. “Reducing the number of employees from grade 1 to 16, while protecting senior officers, will not significantly cut costs,” Bengali stated.

He suggested that eliminating senior positions could potentially save up to Rs30 billion annually.

Dr Bengali also criticized the government’s decision to disregard the recommendations of multiple committees aimed at cost reduction, which had proposed the closure of 50 government departments.

He conveyed his disillusionment with the government's apparent lack of commitment to serious cost-cutting measures.

In response to Dr Bengali’s resignation and critique, a federal government spokesperson dismissed his concerns as stemming from a lack of communication or understanding.

The spokesperson clarified that the government’s right-sizing efforts are indeed targeting positions up to grade 22, contrary to Bengali’s claims.