In a move to ensure fiscal austerity and the optimal utilization of limited resources, the government has imposed several strict measures for the current 2026–27 fiscal year.
These directives include a suspension on the procurement of all types of motor vehicles, watercraft, and aircraft under both development and operating budgets.
Additionally, foreign travel for government officials and interest-free car loans have been temporarily suspended.
The Finance Division issued a circular on Wednesday, July 8, detailing these directives.
The order applies to all government, autonomous, state-owned, statutory, public sector corporations, and state-owned companies and financial institutions.
Key Restrictions and Exceptions
Vehicle Procurement: Expenses for purchasing vehicles cannot be drawn from the development or operating budgets for the current fiscal year. However, exceptions will be made for replacing vehicles older than 10 years and for newly established government institutions, provided they obtain prior approval from the Finance Division.
Green Mandate: A new requirement stipulates that, excluding ambulances and security vehicles, any new or replacement jeeps or cars purchased must be Full Electric Vehicles (FEV).
Interest-Free Loans: The special interest-free loan facility for government employees to purchase vehicles remains suspended for the time being.
Foreign Travel Policy
Prohibitions: Participation in all types of foreign training, seminars, symposiums, and workshops funded by the government is strictly prohibited.
Allowed Travel: Travel will be permitted if funded entirely by foreign governments, institutions, or development partners. Officials may also travel abroad for Master’s and PhD programs under scholarships or fellowships provided by development agencies, universities, or foreign nations.
Technical Exceptions: Mandatory foreign components of basic training provided by training institutes may be held at suitable local universities or institutions. Regarding Pre-Shipment Inspection (PSI) or Factory Acceptance Test (FAT), only technical or expert officials may be considered for travel, limited strictly to complex products where PSI is mandatory. The Finance Ministry, however, prioritizes inspections conducted through internationally recognized agencies.
Construction and Land Acquisition
Construction: The construction of new residential, non-residential, or other buildings under the operating budget is halted. Ongoing construction projects that have already achieved at least 70% progress may be completed, subject to Finance Division approval.
Land Acquisition: No funds from the operating budget can be spent on land acquisition. Expenditures for land acquisition under the development budget will only be permitted after fulfilling all formalities and obtaining Finance Division approval.
Fiscal Discipline
The Finance Division has also specified that no funds from the "lump-sum allocation" (thok allotment) in the operating budget can be spent. Funds reserved under the Planning Commission for "development assistance for special needs" may be spent only with prior approval from the Finance Division.
While vehicle procurement is generally suspended under the development budget, projects already approved prior to the issuance of this circular may be granted exemptions.
The Ministry of Finance emphasized that the core objective of these measures is to ensure "Value for Money" and the highest level of fiscal discipline across all sectors.
