The decision was taken during a high-level meeting chaired by Shehbaz Sharif. Officials said the new austerity policy includes cuts in salaries, allowances and government spending across federal and provincial departments.
Under the plan, ministers, advisers and special assistants at both federal and provincial levels will voluntarily give up two months’ salaries and allowances. Senior government officers in Grade 20 and above earning more than Rs300,000 per month will face a deduction equal to two days’ salary.
The government has also ordered a 20 percent reduction in the non-development budgets of all departments for the last quarter of the current fiscal year. Officials said this measure alone could save around Rs22,000,000,000 at the federal level.
Several other cost-cutting steps have also been announced to reduce government expenses. The purchase of new durable goods has been banned until June 2026. Any purchase of information technology equipment will now require approval from the National Information Technology Board and the relevant strategy committee.
Authorities have also imposed a ban on official foreign visits by cabinet members, parliamentarians and government officers. Only essential trips will be allowed, and all officials travelling abroad must use economy class regardless of the source of funding.
Fuel supply for government vehicles will be reduced by 50% for the next two months. However, operational vehicles such as ambulances, government buses and motorcycles will remain exempt from this restriction. Officials estimate that this step could save about Rs4,500,000,000 at the federal level.
A complete ban has also been placed on the purchase of new government vehicles until June 2026. In addition, about 60% of government vehicles at federal and provincial levels will remain off the roads for two months as part of the fuel-saving drive.
Read more: US Embassy releases security alert for staff during religious processions
The government has also banned official banquets except when hosting foreign delegations. Seminars, conferences and training programmes will require approval from a special committee to ensure that only essential events take place.
Departments have also been directed to use government auditoriums and facilities instead of private venues to reduce expenses. Officials said teleconferencing and virtual meetings will now be encouraged to cut travel and event costs.
The government will also continue its right-sizing programme aimed at reducing administrative spending and improving efficiency in public offices.
The austerity policy shows that the government is trying to control rising expenses during a difficult economic period. Salary sacrifices by ministers are meant to send a symbolic message of shared responsibility. However, experts say real savings will depend on how strictly these measures are implemented. If enforced properly, the policy could reduce unnecessary government spending.
