Austerity measures to continue in revised FY26 budget; car purchases, foreign trips to remain suspended
However, foreign travel may be permitted on an exceptional and limited basis with prior approval from the competent authority.
The government will maintain its austerity policy in the revised budget for the current 2025-26 fiscal year, restricting expenditure on non-essential items such as car purchases and foreign travel.
The Finance Division issued a circular today (27 October), notifying all ministries and divisions of the guidelines for preparing the revised budget.
According to the circular, no ministry or division will be allowed to seek additional allocations in the revised budget.
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It stated that in line with the ongoing expenditure control policy of recent years, ministries and divisions must continue practicing austerity while preparing their revised budget estimates, which must be submitted to the Finance Division by 9 November.
The revised budget must remain within the allocation limits of the original budget, the circular noted. While reallocations within the same category of expenses may be allowed to prioritise key government programmes, unused development funds cannot be transferred to the operating budget.
Under the austerity guidelines, all types of participation in foreign workshops and seminars at government expense will remain suspended. However, foreign travel may be permitted on an exceptional and limited basis with prior approval from the competent authority.
The circular further stated that purchases of vehicles, ships, and aircraft will remain halted, except for replacing vehicles over 10 years old with prior approval from the Finance Division under the operating budget.
Additionally, spending on land acquisition under the operating budget will be suspended, though it may be allowed under the development budget with conditions. Some expenditure areas will remain frozen, while limited flexibility may be granted for priority sectors.
For the revised Annual Development Programme (ADP), the Finance Division also issued 13 directives, including limiting the number of projects.
Officials from the division said the government's revenue collection has fallen short of target, forcing it to rely more on borrowing. Public expenditure has already risen in several areas, so they are reviewing where savings can be made, one official said.
The impact of these cost-cutting measures is expected to be reflected in the revised budget to be finalised in December. Typically, the government revises the national budget in March, but this year's process has been advanced due to the upcoming national election in February.
