Government Tightens Spending With New Austerity Drive
The federal government has implemented austerity measures in the government sector to mitigate the impact of the global energy crisis and rising fuel prices.
Under the new decisions, the fuel allocated for government vehicles has been reduced by 50 percent for three months. The government has also stopped the purchase of new vehicles and restricted unnecessary government expenditure and foreign trips.
According to a notification dated September 17 of the Cabinet Division, the new fuel quota for government vehicles will come into effect immediately. Operational vehicles associated with the armed forces, civil armed forces, law enforcement agencies and essential services have been exempted from this decision. The ban will also not apply to development projects.
The federal government has also directed a 5% monthly reduction in non-employee expenses for the current fiscal year. The decision also includes expenses related to Pakistani missions abroad and government officials posted there.
Government agencies will no longer be able to purchase any new vehicles. There will also be a ban on the purchase of durable goods; however, essential IT-related purchases and development projects will be exempted from this ban.
The government has also restricted foreign travel of government officials and elected officials for three months. Ministers, advisors, aides, members of parliament and other government officials will travel in economy class if essential travel is allowed. Some scholarships, training programmes and visits under institutional agreements will be exempted.
The procedure for government meetings has also been changed. Departments have been directed to hold meetings through teleconferencing wherever possible. Seminars, training programmes and conferences with government funds will also be banned. Government buildings will have to be used in case of an essential event.
The government has also banned official dinners. Official dinners in honour of foreign delegations will be exempted from this ban.
The new decisions will also have an impact on business hours. Shops, markets, shopping malls, general stores and other large commercial centres will have to close by 9 pm. A limit of 10 pm has been set for wedding halls and function venues, while restaurants, cafes and other food and beverage outlets will be able to operate till 11 pm. Takeaway and home delivery will be exempted from this ban.
Pharmacies, medical centres, hospitals, medical stores, laboratories, bakeries, tandoors, milk and dairy shops and petrol and CNG pumps have been exempted from the prescribed hours. IT companies, call centres and some sports facilities have also been included in this list.
The requirement to serve only one dish at weddings and related functions has also been reimposed.
The federal government has also advised provincial and territorial governments to adopt similar austerity measures. Therefore, further instructions issued by local administrations on business hours will also be important.
The measures come at a time when the ongoing dispute in the Gulf has increased pressure on global energy supplies and oil prices. Pakistan is already directly affected by changes in global prices due to its dependence on imported fuel. The government has also launched a limited fuel relief programme of Rs 100 per litre for motorcycles, rickshaws and vehicles up to 800 cc during the same period.
