The Cabinet Division has issued a fresh notification announcing new austerity and fuel-saving steps to cut government spending. The move targets senior officials, foreign missions, and operational budgets across federal institutions.
The notification, issued on March 14, confirms that Prime Minister Shehbaz Sharif approved the measures. The decision followed recommendations from the Committee for Monitoring and Implementation of Fuel Conservation and Additional Austerity Measures.
Under the new plan, senior management in state-owned enterprises, autonomous bodies, statutory institutions, and regulatory authorities will take a two-month salary cut. The reductions will apply to gross salaries of chief executive officers, executive directors, directors, and senior managers.
Officials earning between Rs. 300,000 and Rs. 1 million will face a 5% cut. Those earning Rs. 1 million to Rs. 2 million will see a 15% reduction. Salaries between Rs. 2 million and Rs. 3 million will be reduced by 25%. Anyone earning above Rs. 3 million will take a 30% cut for two months. All deducted amounts will go to the Prime Minister’s Austerity Fund 2026.
| Salary Bracket | Percentage to be Deducted |
|---|---|
| Rs. 300,000 to Rs. 1,000,000 | 5% of gross salary for two months |
| Rs. 1,000,001 to Rs. 2,000,000 | 15% of gross salary for two months |
| Rs. 2,000,001 to Rs. 3,000,000 | 25% of gross salary for two months |
| More than Rs. 3,000,000 | 30% of gross salary for two months |
At the same time, the government has ordered that 100% of board fees paid to its nominees be deposited into the same fund. This rule applies to state-owned enterprises, statutory bodies, and even private sector companies where government nominees sit on boards.
Diplomatic spending has also been trimmed. The Ministry of Foreign Affairs of Pakistan will hold simple flag-hoisting ceremonies on March 23 instead of receptions at overseas missions. In addition, foreign missions will face a 20% cut in their non-ERE budgets. Staff posted abroad will see a two-day salary deduction. However, rent, education fees, and medical expenses will continue without disruption.
The government has also imposed a complete ban on foreign visits and official overseas travel for two months. This includes obligatory events. If participation is necessary, Pakistan’s ambassadors or high commissioners will represent the country. Fully funded short- and long-term training programs offered by international financial or development institutions remain exempt.
Operational exceptions have been carved out. The Federal Board of Revenue and institutions under the Revenue Division will not follow the work-from-home policy or the four-day work week. Official vehicles used for Customs enforcement and Inland Revenue Enforcement Network operations will also remain active. However, the FBR must still meet overall fuel reduction targets through adjustments in other departments.
Security agencies have similar exemptions. Law enforcement bodies and the armed forces will continue regular operations due to security needs. Yet departments not involved in ground-level security must reduce fuel allocation by 50% and park 60% of official vehicles.
The notification also calls for fewer security vehicles for vulnerable dignitaries. Moreover, principal accounting officers have been instructed to ensure official vehicles are used strictly for official work.
To ensure compliance, all federal institutions and provincial governments must submit weekly reports through a digital portal developed by the Ministry of Information Technology and Telecommunication, Pakistan. Meanwhile, the Intelligence Bureau of Pakistan will conduct a full audit of fuel cuts and vehicle grounding. It will submit weekly reports to the prime minister and the monitoring committee.
In parallel, the IT ministry has been told to provide APN devices for the e-Office system within four days. Ministries and divisions must submit their requirements immediately.
