Government Moves to Cut Expenses Under New Austerity Plan

Islamabad: Amidst rising global fuel prices and supply pressures, the federal government has implemented a new austerity policy to limit government spending and fuel consumption. The government has reduced the fuel quota of government vehicles by half and also imposed restrictions on non-essential government purchases and foreign trips.

According to a notification issued by the Cabinet Division, these measures will come into effect immediately. The 50 percent reduction in the fuel quota of government vehicles will continue for three months. However, operational vehicles related to the armed forces, civil armed forces, law enforcement agencies and essential services have been exempted from this restriction. Vehicles used for development projects will also not be covered by this decision.

The government has also decided to reduce non-employee-related expenses during the financial year 2026-27. Government institutions have been directed to limit such expenses that are not immediately necessary.

The purchase of new vehicles has also been stopped. In addition, there will be a ban on the purchase of durable goods by government institutions. Exceptions have been made in some essential sectors and in certain circumstances.

Official travel abroad has also been restricted. Non-essential visits by ministers and government officials have been stopped for three months. In case of essential official travel, relevant permission will have to be obtained, while travel has been directed to be done in economy class.

The government has also made practical changes to reduce the cost of official meetings. Apart from inter-district meetings, most meetings have been directed to be held through video or teleconference. Government institutions will also have to avoid formal dinners and unnecessary events.

There is also a ban on holding seminars, conferences and training programmes with government funds. If an event is unavoidable, priority has been given to government buildings and available government facilities.

A key part of the new austerity measures relates to business hours. Shops, markets, shopping malls, general stores and other large commercial centres across the country will have to close by 9 pm. Wedding halls and other function venues have been given a deadline of 10 pm, while restaurants and cafes will be able to operate until 11 pm. Takeaway and home delivery services will be exempted from these restrictions.

Essential services have been kept out of the business hours restrictions. Pharmacies, hospitals, clinics, medical stores, laboratories, bakeries, tandoors, milk and dairy shops, petrol pumps and some other essential businesses will be exempted from this ban. IT companies and call centres have also been exempted.

The government has also maintained the one-dish rule for food at weddings and other functions. Along with this, government institutions have been directed to reduce expenses and ensure prudent use of energy and fuel.

The federal government has taken these steps at a time when global oil prices and ongoing tensions in the region have increased the pressure on fuel costs for Pakistan. On the other hand, the government has also launched a Rs 100 per liter relief scheme for owners of motorcycles, rickshaws and vehicles up to 800 cc.