ISLAMABAD – In a significant move aimed at curbing public expenditure, the federal government has imposed a comprehensive ban on specific spending, including the purchase of new vehicles and state-funded medical treatment abroad. This follows a Finance Division notification issued this week, as the government grapples with economic pressures and criticism over its fiscal policies.
The austerity measures are part of the government’s broader strategy to secure a $7 billion bailout package from the International Monetary Fund (IMF) while addressing concerns about unchecked public sector expenditures. Recent actions have included tough budget measures and increased energy costs, with calls for more effective expenditure control across government departments.
Key Restrictions Announced
The September 4 notification, seen by Dawn.com, outlines a complete ban on the purchase of vehicles, except for operational purposes such as ambulances, fire trucks, school buses, and solid waste management vehicles. Motorcycles are also exempted.
Additionally, the procurement of machinery and equipment, unless necessary for hospitals, laboratories, schools, agriculture, or mining, has been prohibited. The government will also freeze the creation of new posts, including temporary ones, and abolish positions that have been vacant for over three years.
Medical treatments abroad using government funds have been entirely prohibited, and non-essential foreign trips funded by the government are also banned.
Restructuring Plans
The notification follows earlier decisions to dissolve regulatory bodies for devolved sectors, phase out non-executive federal staff, eliminate transport facilities for ministries, and merge aviation and maritime divisions with the defense ministry. These steps are part of the government’s broader restructuring plans, aimed at reducing operational costs and streamlining governance.
A senior official indicated that further austerity and restructuring measures will be announced soon by the prime minister, pending cabinet approval. These include the elimination of various federal regulatory councils established under the 18th Amendment.
There will also be restrictions on hiring staff for federal universities and hospitals, with academic staff being hired on lump-sum contracts. The recruitment freeze extends to grade 1-16 employees, with plans to eventually abolish support staff positions, encouraging a shift towards digital tools and artificial intelligence.
Provincial Measures
Provinces have already begun implementing similar austerity measures. In Khyber Pakhtunkhwa, the finance department banned vehicle purchases, foreign training programs, and seminars at luxury hotels. Overseas medical treatment funded by the provincial government has also been prohibited, and extensions for project employees have been restricted.
Meanwhile, the Sindh government recently faced scrutiny after approving the purchase of 138 luxury double-cabin vehicles for assistant commissioners, allocating Rs2 billion for the procurement. The government defended the decision, stating that assistant commissioners are essential to the provincial administration’s operations.
These austerity measures highlight the government’s commitment to reducing unnecessary expenditures as it navigates its economic challenges and seeks to meet IMF conditions for financial assistance.
Story by Sanaullah Khan
