Federal govt suspends allowances, other payments to civil servants

2026-03-18 - 09:11

ISLAMABAD – The federal government on Wednesday suspended all payments to civil servants, including allowances, as part of strict expenditure control measures. The sources said that the Accountant General Pakistan Revenues, following special instructions from the government, has halted all payments except regular salaries. The decision reflects Islamabad’s effort to maintain fiscal discipline while engaging with the IMF on critical economic reforms. The officials said the move comes in the backdrop of ongoing negotiations with the International Monetary Fund. The government is determined to meet its financial targets and benchmark requirements, leading to the temporary suspension of all non-salary payments. Bad News! Govt decides to cut employees salaries by up to 30% Earlier, Prime Minister Shahbaz Sharif announced 5 to 30 percent cut in salaries of employees in federal and autonomous institutions under ongoing austerity drive. In a high-level meeting focused on stabilizing petroleum prices and reviewing savings measures, the premier said that funds saved through ongoing government austerity measures will be redirected to public relief initiatives. The government representatives on corporate boards will no longer receive meeting fees, and all embassies have been instructed to observe March 23 celebrations with simplicity. The prime minister directed the Federal Board of Revenue and law enforcement agencies to continue their work as usual. Measures include a 50 percent reduction in fuel use for official vehicles over the next two months, grounding 60 percent of the fleet, implementing third-party audits, and halting new vehicle purchases. Cabinet members, ministers, advisers, and special assistants will have their salaries allocated for public welfare, with a complete ban on foreign trips. Online meetings will be prioritized to reduce expenses. PM Shehbaz instructed relevant secretaries to monitor these austerity measures and submit daily reports. Federal ministers Attaullah Tarar, Muhammad Aurangzeb, Ali Pervaiz Malik, Bilal Azhar Kiani, and the FBR chairman attended the meeting.