Govt Cuts Salaries, Foreign Trips, Fuel Allowances for Officials to Save Money

The federal government has approved a nationwide austerity policy introducing salary cuts, spending reductions and restrictions on official travel and government assets in response to economic pressures arising from the ongoing war situation.

The measures were approved during a high-level meeting chaired by Prime Minister Shehbaz Sharif. Under the plan, ministers, advisers and special assistants at the federal and provincial levels will voluntarily forgo two months’ salaries and allowances. Government officials in Grade 20 and above earning more than Rs. 300,000 per month will face a deduction equivalent to two days’ salary.

The government also approved a 20 percent reduction in the non-development budgets of all federal and provincial departments for the fourth quarter of the current fiscal year. The measure will save around Rs. 22 billion at the federal level.

A number of cost-cutting steps targeting government operations were also announced. The purchase of new durable goods has been banned until June 2026, while procurement of information technology equipment will require prior review and approval from the National Information Technology Board (NITB) and the relevant strategy committee.

The government has also imposed a ban on official foreign visits by cabinet members, parliamentarians and government officials. Only essential official trips will be permitted, and all government officials traveling abroad will be required to use economy class regardless of funding source.

Fuel supply for government vehicles will be reduced by 50 percent for the next two months, except for operational vehicles such as ambulances, government buses and motorcycles. The reduction could save approximately Rs. 4.5 billion at the federal level.

A complete ban has been placed on the purchase of new government vehicles until June 2026. Around 60 percent of federal and provincial government vehicles will be taken off the road for two months as part of the fuel-saving measures.

The government also decided to continue its right-sizing programto cut administrative expenditures. Teleconferencing and virtual meetings will be promoted to limit travel and event costs.

Official banquets have also been banned, with exceptions only for hosting foreign delegations. All official seminars, training programs and conferences will require prior approval from a special committee, which will assess the necessity and priority of each event. Government departments have also been directed to use state-owned auditoriums and facilities for such activities.