PM announces cut in govt expenditure
- Austerity measures would be applied uniformly, says Shehbaz
ISLAMABAD: Prime Minister Shehbaz Sharif on Monday unveiled a comprehensive national austerity policy intended to reduce government spending, describing the measures as essential to conserving fuel in light of the global energy crisis, amid the ongoing Middle East conflict following the US-Israel strike on Iran.
In a televised address to the nation after chairing a special meeting regarding austerity measures across the country in wake of current regional tension, the prime minister said the region was engulfed in conflict and stressed that Pakistan was pursuing diplomatic efforts to help defuse the situation. “The entire region is currently in a state of war,” he said, adding that the country was making every effort through diplomatic channels to resolve the crisis.
He also highlighted security challenges along Pakistan’s western borders, noting that the country continued to face terrorism threats.
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“Our armed forces are addressing the threat effectively,” he said, adding that operations were being conducted under the leadership of Chief of Defence Staff (CDS) and Field Marshal Asim Munir Shah.
Sharif said the austerity measures would be applied uniformly across all ministries, departments, autonomous bodies, defence organisations, the judiciary, and Parliament.
Under the new policy, fuel allocations for all government vehicles will be cut by 50 per cent for the next two months, with operational vehicles – including government buses, ambulances, and motorcycles – remaining exempt. The government expects to save approximately Rs4.5 billion at the federal level. In addition, 60 per cent of government vehicles at both federal and provincial levels will be grounded during this period.
As part of the austerity drive, all federal and provincial cabinet ministers, advisers, and special assistants will voluntarily forgo their salaries and allowances for two months. Members of the national and provincial assemblies will see a 20 per cent reduction in their salaries and allowances over the same period. Officials in grades 20 and above, with monthly salaries exceeding Rs300,000, will face deductions equivalent to two days’ pay.
The government will also impose a 20 per cent cut in the non-development budget for the fourth quarter of the fiscal year across all federal and provincial departments, which is expected to save an estimated Rs22 billion at the federal level.
Key measures announced by the prime minister include: Immediate 50 per cent reduction in petrol and diesel allowances for government vehicles.
Ban on additional protocol vehicles for provincial ministers and senior officials, allowing only one vehicle per official for security purposes.
Implementation of a work-from-home policy for government offices, with essential staff required to attend in person. Closure of schools, colleges, and universities from 10 to 31 March, with online classes permitted and examinations continuing as scheduled. Official business to be conducted via online meetings and teleconferences; all government outdoor events, including horse and cattle shows, postponed. Establishment of District Petroleum Monitoring Committees; Punjab IT Board tasked with developing a track-and-trace system for petroleum products, under district administration and police oversight.
The prime minister cited rising global oil prices due to the Middle East conflict as a primary reason for the austerity measures. Global crude oil has surpassed $100 per barrel, and the situation may worsen, potentially pushing prices higher. He added that the government was striving to mitigate the burden on citizens.
Calling on wealthy and socially responsible individuals to support national efforts. Sharif said it was time for the elite to step forward and fulfil their responsibilities as a socially accountable class.
Other restrictions include: Ban on foreign trips for federal and provincial ministers, advisers, special assistants, and government officials, except those deemed critical to national interest.
Suspension of official dinners, Iftar parties, and seminars in hotels, with government venues to be used instead.
Public and private sector offices, except essential services, to operate four days a week, with 50 per cent of staff working from home.
He clarified that the four-day working week would not apply to banks.
The prime minister warned against hoarding and profiteering, emphasising that strict legal action would be taken against violators. All provincial governments have been directed to enforce these measures.
The meeting was also attended by CDF, Field Marshall and Chief of Army Staff (COAS) Asim Munir.
Copyright Business Recorder, 2026