Ministry of Finance has issued a circular imposing stringent restrictions on government spending for the 2026-27 fiscal year, including a ban on the purchase of vehicles and aircraft, as well as limitations on foreign travel.
The directive, issued by the Finance Division’s Budget Wing-1 on Wednesday, aims to ensure the proper use of limited resources, maintain tolerable inflation levels, and preserve macro-economic stability.
These measures apply to all government, semi-government, autonomous, statutory, state-owned, public sector corporations, and financial institutions.
Vehicle and infrastructure restrictions
Under the operating budget, the government has suspended the purchase of all motor vehicles, watercraft, and aircraft.
Exceptions are made only for the replacement of vehicles over 10 years old or the procurement of full electric vehicles (FEV) for newly formed government organisations, subject to Finance Division approval.
Ambulances and vehicles required for security purposes are exempt from these restrictions.
The circular also halts the construction of new residential and non-residential buildings. Ongoing projects that have achieved at least 70 per cent completion may continue, provided they receive approval from the Finance Division.
Moreover, land acquisition and interest-free special car advances for government employees remain suspended under the operating budget. All honourary allowances under specific economic codes have been suspended.
Development budget and training
For the development budget, vehicle purchases are similarly suspended, though this condition may be relaxed for projects approved before the circular was issued.
Land acquisition and expenditures under “Special Development Assistance” now require prior approval from the Finance Division.
Regarding foreign travel, the directive bans all government-funded training, seminars, symposia, and workshops. Exceptions are permitted for Master’s or PhD courses funded by scholarships or fellowships from development partners, universities, or foreign institutions.
Foreign travel is also allowed if fully funded by foreign governments or international organisations.
Value for money
The directive, signed by Deputy Secretary Mohammad Zakir Hossain, emphasises the need to ensure “Value for Money” in all government expenditures.
Pre-shipment Inspections (PSI) and Factory Acceptance Tests (FAT) are limited to essential complex goods where such inspections are mandatory, with a preference for testing by internationally certified organisations.
The circular has been distributed for immediate action to high-ranking officials, including the cabinet secretary, the principal secretary to the prime minister, and the comptroller and auditor general of Bangladesh.
