Austerity drive halts uplift projects

Over 350 schemes deferred; spending limited to salaries, utility payments

RAWALPINDI:

In the wake of a severe "fiscal and economic crisis" and ahead of the presentation of the 2026–27 budget, the provincial government has imposed an immediate emergency freeze on all new development schemes and the release of development funds across Punjab, including the Rawalpindi Division.

Under the decision, the finance ministry has recalled all unutilised funds held by 44 government departments and agencies. As a consequence, approximately 360 development schemes under the Annual Development Programme (ADP), district councils and municipal corporations across the Rawalpindi Division have been deferred.

The government has further prohibited the release of funds for development projects until 31 July, the first month of the new financial year.

Sources said that departments were not even asked to submit individual project proposals for inclusion in the 2026–27 budget. Instead, the government intends to prioritise large-scale projects serving the broader public interest rather than department-specific schemes, with a consolidated development allocation to be determined accordingly.

For the months of June and July, government departments have been authorised to utilise funds solely for the payment of employees' salaries and utility bills. All other expenditures have been suspended until 31 July, including procurement, miscellaneous operational spending and various employee-related payments.

The measure has effectively exhausted the operational funds available to departments, according to official sources. Heads of departments and senior officials have also been barred from purchasing office furniture, air-conditioning equipment and other non-essential items.

In addition, no departmental head will be permitted to inaugurate any new development scheme or project before July 31, as part of the government's broader austerity and expenditure-control measures aimed at managing the province's financial constraints ahead of the new budget.