Faced with a revenue shortfall in the first six months of the current fiscal year, the government has introduced strict austerity measures to curb public expenditure.
The new policy eliminates various allowances for employees, restricts vehicle purchases, and mandates the use of domestic products in government offices. Meeting allowances for employees, including those in committees and task forces, will no longer be provided for work conducted outside office hours unless legally mandated. Incentives such as overtime, risk, and special allowances will also be discontinued, except where required by law.
Government funds can no longer be used for banquets, except when hosting foreign guests. Additionally, expenses such as maintenance, fuel, and meeting allowances cannot be covered under program budgets. Risk allowances will now be distributed based on the Ministry of Finance’s available resources.
The policy also requires an assessment within two months to determine whether old government vehicles, particularly those over 20 years and deemed inoperable after repairs, can be converted to electric models. If a vehicle is found suitable for conversion, the Ministry of Finance may grant approval after evaluating the cost-effectiveness and necessity.
To control vehicle expenditures, officials entitled to transport facilities will be limited to one vehicle, except in legally specified cases. Government agencies must maintain updated records of their vehicles and ensure the economical use of existing ones.
The purchase of four-wheelers is now prohibited, except for essential services such as health and security. Vehicles for construction, monitoring, and election programs can only be procured with government funds, foreign grants, or loans, and require approval from the Ministry of Finance. Any unserviceable vehicles must be auctioned or scrapped within four months, following legal procedures.
Additionally, all government offices must prioritize domestic goods in procurement, adhering to existing guidelines promoting local products.
According to Mahesh Bhattarai, spokesperson for the Ministry of Finance, a high-level monitoring committee led by the Chief Secretary has been formed to ensure strict implementation of the austerity measures. The committee includes secretaries from the Prime Minister’s Office, Ministry of Finance, Ministry of Physical Infrastructure, and Ministry of Federal Affairs.
Provincial and local governments are also permitted to introduce their own expenditure standards, provided they align with the national framework.
The Council of Ministers approved the Public Expenditure Efficiency and Austerity Standards, 2081 in a meeting on February 3, and officials confirm that implementation has already begun.
