The Cabinet Division of Pakistan has officially rolled out a comprehensive austerity plan aimed at curbing government expenditure and conserving fuel resources. This initiative includes salary reductions for senior officials and other cost-saving measures across various government institutions, marking a significant step in the government’s ongoing efforts to tighten fiscal discipline. The notification was issued on Sunday, signaling the start of a two-month period during which these austerity policies will be actively enforced.
Under the newly introduced framework, a tiered salary deduction system has been established targeting senior management personnel within government departments and regulatory bodies. Officials drawing monthly salaries ranging from Rs300,000 to Rs1 million will experience a five percent cut. Meanwhile, those earning between Rs1 million and Rs2 million will face a more substantial reduction of 15 percent. The deductions become steeper for higher earners, with salaries between Rs2 million and Rs3 million being slashed by 25 percent, and individuals earning above Rs3 million subjected to a 30 percent decrease. This structured approach reflects the government’s intent to distribute the burden proportionally based on income levels.
In addition to salary cuts, the government has mandated a complete 100 percent deduction of fees for officials serving as representatives on the boards of both public and private sector companies. All funds recovered through these deductions are to be funneled directly into the newly established Prime Minister Austerity Fund 2026, which will be utilized to support broader economic stabilization efforts. This fund represents a central component of the government’s strategy to consolidate savings and redirect resources toward priority areas.
Further austerity measures extend to the Ministry of Foreign Affairs, which has been instructed to observe Pakistan Day with a simplified flag-hoisting ceremony, foregoing the usual elaborate receptions and gatherings. The ministry’s budget for foreign missions will also be trimmed by 20 percent, and officers working in these missions will face a two-day salary deduction as part of the cost-cutting drive. Moreover, a strict ban on foreign travel for government officials has been imposed for the next two months, with ambassadors expected to represent Pakistan at international forums in lieu of in-person visits. These steps underscore the government’s commitment to reducing unnecessary expenditures in diplomatic circles.
Operational agencies such as the Federal Board of Revenue, Customs, and Inland Revenue Operations have been exempted from work-from-home directives and restrictions on official vehicle use, recognizing the critical nature of their functions. Similarly, law enforcement agencies will continue to operate without the imposition of a four-day workweek, ensuring that public safety and security remain uncompromised. However, fuel consumption for security institutions will be curtailed by 50 percent, and 60 percent of government vehicles are to remain off the roads, reflecting a balance between operational necessity and austerity.
To monitor and enforce these fuel and vehicle usage restrictions, the Intelligence Bureau Pakistan has been tasked with conducting a thorough audit. This audit will evaluate current consumption patterns and vehicle deployment, with a detailed report to be submitted directly to Prime Minister Shehbaz Sharif. This oversight mechanism is designed to ensure transparency and accountability in the implementation of austerity measures.
In terms of administrative oversight, all federal and provincial departments are now required to submit weekly performance reports through a dedicated IT portal. This move aims to enhance monitoring of departmental activities and track progress in achieving austerity targets. Additionally, a sub-committee led by the Finance Secretary has been formed to supervise the transfer of savings into the Prime Minister Austerity Fund, ensuring that the financial benefits of these measures are properly managed and utilized.
Overall, these austerity initiatives reflect the government’s proactive stance in addressing economic challenges by reducing unnecessary expenditures and promoting fiscal responsibility across all levels of administration. The success of this drive will depend on strict adherence to the outlined measures and continuous oversight to maintain momentum in the months ahead.
