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The government has suspended overseas travel for public officials and the purchase of personal vehicles under the interest-free special loan scheme in the budget for fiscal year 2026-27. It has also ordered a halt to the purchase of all types of motor vehicles, watercraft and aircraft as part of its austerity measures.
The directives were issued in a circular by the Finance Division on Wednesday. The decision will apply to all government ministries, autonomous bodies, state-owned enterprises, statutory organisations, public sector corporations, state-owned companies and financial institutions.
The government said the measures are aimed at ensuring the efficient use of limited resources, bringing inflation to a tolerable level and maintaining macroeconomic stability.
As part of the cost-cutting drive, no allocation under either the development or operating budget can be used to purchase motor vehicles, watercraft or aircraft during the current fiscal year.
However, the restriction will not apply to the replacement of vehicles that are more than 10 years old. Newly established government institutions may also purchase vehicles with prior approval from the Finance Division.
The circular introduced a new condition requiring that, except for ambulances and vehicles used for security purposes, all newly purchased or replacement government cars and jeeps must be fully electric vehicles (FEVs).
The government has also suspended the interest-free special loan facility that allows public servants to purchase personal vehicles.
In addition, participation in all foreign training programmes, seminars, symposiums and workshops funded by the government has been suspended. Officials, however, may attend programmes financed by foreign governments, international organisations or development partners.
Government employees will also be allowed to travel abroad for master’s and PhD studies under scholarships and fellowships offered by development partners, universities or foreign countries.
The overseas component of mandatory basic training conducted by government training institutes may continue if arranged at appropriate universities or institutions abroad.
For pre-shipment inspections (PSI) and factory acceptance tests (FAT), foreign travel will be permitted only for technical experts or specialists when dealing with complex equipment or where such inspections are mandatory. The Finance Ministry said internationally accredited testing agencies should be given priority wherever possible.
The circular also suspended the construction of new residential, non-residential and other buildings under the operating budget. Ongoing projects that are at least 70 percent complete may be finished with approval from the Finance Division.
No operating budget funds may be used for land acquisition. However, land acquisition under the development budget may proceed after completing all required formalities and obtaining Finance Division approval.
The Finance Division further said no contingency allocation under the operating budget may be spent during the current fiscal year. Funds reserved under the Planning Commission’s “Development Assistance for Special Needs” may be used only with prior approval from the Finance Division.
Although vehicle purchases under the development budget have been suspended, projects approved before the issuance of the circular may receive exemptions. The Finance Ministry stressed that all public spending must ensure the best value for money.