The Finance Division on Tuesday notified the continuation of stringent austerity measures for fiscal year 2026–27, imposing a ban on the purchase of all types of vehicles, procurement of machinery and equipment, and creation of new posts across government departments.
All ministries, divisions, state-owned enterprises (SOEs), statutory bodies, and regulatory authorities have been directed to continue enforcing strict expenditure controls as part of efforts to contain public spending and improve fiscal discipline.
According to the official notification, the federal cabinet approved the continuation of austerity measures originally adopted in 2023 and 2024 during its consideration of the Annual Budget Statement for FY2026–27.
The Finance Division directed all ministries and divisions to ensure strict implementation of the expenditure curbs across their attached departments, autonomous bodies, corporations, authorities, SOEs, and statutory organisations.
The notification stated that austerity measures previously issued by the Cabinet Division in February 2023, along with additional restrictions announced by the Finance Division in September 2024, would remain in force throughout FY2026–27.
For state-owned enterprises, the directives will be treated as binding instructions of the federal government under Section 35 of the State-Owned Enterprises (Governance and Operations) Act, 2023. Statutory bodies will be required to implement the measures under the relevant provisions of their respective laws.
The cabinet also authorised the Austerity Committee of Finance Division to grant exemptions from the restrictions on a case-by-case basis, provided sufficient justification is presented.
All ministries and divisions have been asked to circulate the instructions to their subordinate organisations and ensure strict compliance with the cost-cutting measures, which are aimed at containing non-essential expenditures amid ongoing fiscal consolidation efforts.
