Rs65.8 crore austerity savings reported in 2 years, audits still pending

Pakistan’s federal government reported savings of Rs65.8 crore under its austerity programme over two financial years, but the figures

Islamabad:  Pakistan’s federal government reported savings of Rs65.8 crore under its austerity programme over two financial years, but the figures are still awaiting full audit verification, according to a written reply by Finance Minister Muhammad Aurangzeb in the National Assembly. The government reported savings of Rs27.34 crore in financial year 2024 to 25 and Rs38.47 crore in 2025 to 26, while the audit for the first year remains under process and the audit for the second year has yet to be conducted.

The figures raise questions about the actual financial impact of the government’s austerity drive, which includes restrictions on official vehicle purchases, procurement, foreign travel and the creation of new government posts. The question was raised by MNA Sahibzada Sibghatullah Khan, who sought details of the savings, an independent review of the results and information about how the money had been used.

The ministry wise tables attached to the reply show that, during the financial year 2024 to 25, the final budget for the listed expenditure categories was around Rs21.87 billion, against actual spending of Rs21.59 billion. This left reported savings of Rs273.41 million.

For the financial year 2025 to 26, the final budget for the listed categories stood at around Rs16.32 billion, while actual spending was Rs15.94 billion. The reported saving was Rs384.67 million. These tables cover procurement, purchase of transport and travel expenses across federal ministries. They should not be mistaken for a complete account of savings from every austerity measure.

The official papers also contain conflicting instructions about hotel accommodation for Cabinet members travelling abroad. The Finance Division’s written response says Cabinet members shall only stay in five star hotels during foreign visits. However, an attached Cabinet Division memorandum dated February 28, 2023, says Cabinet members shall not stay in five star hotels abroad. The supplied documents do not explain this contradiction.

Under the government’s austerity policy, a ban was imposed in September 2024 on buying vehicles, except for essential operational needs such as ambulances, medically equipped vehicles, fire fighting vehicles, buses and vans for educational institutions, solid waste vehicles and motorcycles. The purchase of machinery and equipment was also restricted, with exceptions for hospitals, laboratories, agriculture, mining and schools.

The policy also banned the creation of new posts, including temporary and contingent paid jobs, and stopped temporary posts from continuing beyond one year. Posts that had remained vacant for three years were to be abolished. However, purchases and creation of posts under Public Sector Development Programme funded projects were exempt from these restrictions.

Government funded medical treatment abroad and non obligatory foreign visits paid for by the government were also banned. Officials were permitted to travel abroad only for essential visits, in economy class and without accompanying support staff. Cabinet members were required to travel in economy class on domestic and foreign trips, with no support staff on foreign visits.

Earlier Cabinet measures also called on federal ministers, ministers of state, advisers and special assistants to voluntarily give up their salaries and allowances. Ministers were directed to pay their own gas, electricity, water and telephone bills. Luxury vehicles assigned to Cabinet members were to be withdrawn, with only one security vehicle provided when necessary. Teleconferencing was encouraged to reduce travel and accommodation costs.

Restrictions were also placed on recruitment against existing vacancies in grades BS 1 to BS 16, requiring prior approval from the Austerity Committee, with exceptions for the armed forces, civil armed forces and other law enforcement and security agencies, as well as cases where the recruitment process had already begun.

The Cabinet extended the austerity measures for financial year 2026 to 27 through a notification issued by the Finance Division on July 21, 2026. The measures also apply to attached federal departments, state owned enterprises, statutory bodies and regulatory authorities. The Austerity Committee may grant exemptions where sufficient reasons are presented, but each case must be considered separately.

Aurangzeb told the National Assembly that the savings remained unutilised and helped the government contain the fiscal deficit. He also said Prime Minister Shehbaz Sharif had formed a committee led by Deputy Prime Minister Ishaq Dar to improve government efficiency and the performance of federal institutions.

The government has continued the austerity programme for a third financial year, but the final audit findings will be important in establishing how much the measures actually saved and whether the reported savings were achieved through lasting reductions in public spending.