The Government of Pakistan on Monday nullified an earlier order capping earnings of bureaucrats appointed to boards of corporate entities while simultaneously notifying the continuation of austerity measures for all government-affiliated bodies.
In 2024, the federal cabinet had approved a cap of Rs. 1 million annually on fees accrued by bureaucrats to attend board meetings. Under the policy, the bureaucrats were directed to surrender the surplus amount to the treasury. However, most bureaucrats chose to ignore the policy, leading to the Cabinet Division withdrawing its decision last month.
“In pursuance of the Cabinet Division decision dated 22-06-2025, the Finance Division’s letter dated 10-07-2024 and Office Memorandum stand withdrawn ab-initio,” read a notification issued by the Finance Ministry. The fee to attend a single board meeting can range from Rs. 100,000 to Rs. 1 million, depending on the entity.
Austerity measures
Also on Monday, the Finance Ministry notified the continuation of austerity measures for fiscal year 2025-26, banning the creation of new posts, purchase of new vehicles and machinery, and non-obligatory foreign tours on government expense. It also seeks the abolishment of all posts lying vacant for the past three years. The measures apply to all federal government-attached departments, state-owned enterprises, and statutory bodies, including regulatory authorities and aim to reduce expenditures.
According to the notification, only the purchase of operational vehicles, such as ambulances and other medical equipment vehicles, fire engines, buses and vans for educational institutions, solid waste vehicles, and motorcycles is permitted, if necessary. Despite this policy already being in place last, the government approved the purchase of new vehicles for the Federal Board of Revenue (FBR) amidst great controversy.
Salary Hike
Additionally, the Finance Ministry has notified a 10% salary increase for armed forces personnel, civil armed forces, and all civil employees of the federal government, as well as civilians paid from defense estimates and contract employees employed against civil posts in basic pay scales under standard terms and conditions. This decision had already been announced in the Finance Bill 2025.
In accordance with the approved budget, the ministry has also notified a 7% increase in net pensions for all civil pensioners of the federal government.