KP Govt issues austerity measures, budget execution guidelines

Khyber Pakhtunkhwa Finance Department issued comprehensive Austerity Measures and Budget Execution Guidelines for Fiscal Year 2026–27 following approval by the Provincial Cabinet

PESHAWAR, (APP - UrduPoint / Pakistan Point News - 23rd Jul, 2026) Khyber Pakhtunkhwa Finance Department issued comprehensive Austerity Measures and Budget Execution Guidelines for Fiscal Year 2026–27 following approval by the Provincial Cabinet.

The directives are aimed at strengthening fiscal discipline, curbing unnecessary expenditure, improving revenue generation, enhancing internal accountability, and ensuring the transparent, responsible, and prudent utilization of public resources.

According to the official notification, all administrative departments, autonomous and semi-autonomous bodies, divisional commissioners, deputy commissioners, attached departments, and other relevant institutions have been directed to implement the guidelines in letter and spirit, in accordance with the decisions approved by the Provincial Cabinet during its meeting held on 19 June 2026.

Under the austerity measures, the provincial government has prohibited the creation of new posts, the purchase of unessential official vehicles, participation in overseas workshops, seminars, and training programmes using provincial funds, the holding of official events in five-star hotels, and overseas medical treatment at the expense of the provincial government. However, in matters involving public interest or unavoidable necessity, the Chief Minister of Khyber Pakhtunkhwa may review each case individually and take an appropriate decision.

The Finance Department has also instructed all Principal Accounting Officers to convene Departmental Accounts Committee meetings regularly to further strengthen the internal audit system.

Furthermore, departments have been directed to keep expenditures strictly within the limits of released funds, and under no circumstances shall financial liabilities be created before funds are made available.

The guidelines further state that, to improve provincial revenue collection, the Provincial Revenue Review Committee, chaired by the Advisor on Finance will continuously monitor the performance of all revenue generating departments, recommend necessary reforms, establish performance indicators, and propose legal and administrative measures to further strengthen the provincial revenue system.

The Finance Department has clarified that prior approval from the Finance Department, along with strict compliance with the relevant rules, will be mandatory for appointments on daily wages, contingent-paid staff, leave vacancies, and recruitment against vacant posts.

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No appointments will be permitted against dying cadre positions.

According to the notification, development projects involving the creation of new posts or the procurement of vehicles, machinery, equipment, and furniture shall not be processed without prior approval from the Finance Department.

All departments have been directed to deposit their receipts immediately into Provincial Account-I, while autonomous and semi-autonomous bodies, as well as Medical Teaching Institutions, must submit quarterly reports on their reserve funds and procurement plans to the Finance Department.

The department has also emphasized that maintenance and repair projects must comply with prescribed rules and regulations, obtain approval from the relevant forums, and secure administrative sanction before execution. All Works Departments have been instructed to maintain a complete digital record of maintenance projects on the designated e-portal and submit quarterly internal audit reports to the Finance Department.

The notification further states that funds allocated for advertisements must be utilized solely for the approved purpose. The Information Department has been tasked with maintaining a comprehensive record of all government advertisements and publications and conducting reconciliation at least twice a year.

Additionally, all autonomous and semi-autonomous bodies, Medical Teaching Institutions, and other public sector organizations have been directed to ensure full implementation of these austerity measures with the approval of their respective governing forums.

The Finance Department has also instructed all government institutions to maintain strict oversight over the use of official vehicles, petroleum, oil and lubricants (POL), and vehicle maintenance expenditures, avoid unnecessary official travel, maximize the use of online platforms for official meetings, and minimize non-essential expenses, including hospitality during official meetings.