The Finance Division has officially notified a new round of austerity measures for the fiscal year 2025–26, aimed at curbing federal government expenditures.

The notification, issued in line with a federal cabinet decision dated June 10, 2025, confirms the continuation of austerity directives previously announced in fiscal years 2023–24 and 2024–25.

The measures apply across all federal government departments, state-owned enterprises (SOEs), regulatory authorities, and statutory bodies.

A complete ban has been imposed on the purchase of all types of vehicles. Exceptions will be made only for operational vehicles such as ambulances, fire-fighting trucks, solid waste management vehicles, buses and vans for educational institutions, medically equipped transport, and motorbikes.

• The procurement of machinery and equipment is banned, except for essential sectors including hospitals, laboratories, agriculture, mining, and schools.

• No new posts will be created during FY 2025–26. This includes regular, contingent paid, and temporary posts.

• Contingent paid or temporary posts cannot be continued beyond one year.

• All treatment abroad at government expense is banned.

• All non-essential foreign visits involving funding from the Government of Pakistan are prohibited.

• All government posts that have remained vacant for the last three years will be abolished.

• Purchases of durable goods and creation of posts under Public Sector Development Programme (PSDP) funded projects are exempt from this ban.

The austerity measures previously notified by the Cabinet Division on February 28, 2023, and by the Finance Division on September 4, 2024, will remain in effect unless specifically withdrawn or modified by the federal cabinet.

These austerity directives are legally binding for state-owned enterprises under Section 35 of the State-Owned Enterprises (Governance and Operations) Act, 2023.

Statutory bodies must also comply with the austerity measures under the applicable provisions of their respective governing laws.