In a major move, the BNP government has tightened control over public expenditure by freezing a range of government spending, including vehicle and aircraft purchases, foreign trips, land acquisition and new residential projects.
The decision comes as the government faces financial constraints and a struggling economy, with the move aimed at reducing pressure on public finances, preventing wasteful spending and ensuring better use of limited resources.
The Finance Division issued a circular on Wednesday, directing all government, semi-government, autonomous and statutory organisations to follow strict spending restrictions under the operating and development budgets for the fiscal year 2026–27.
Welcoming the move, Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said it reflects a necessary shift towards greater fiscal prudence.
“The government becoming more economical is a very positive step,” he told TIMES of Bangladesh.
Given the current state of revenue collection, he pointed out that the austerity was essential. “Otherwise, the government’s borrowing would have increased further, placing an even heavier burden on the country’s finances.”
The circular freezes expenditure under all categories of block allocations in the budget, a move expected to save Tk117,000 crore, including the entire block allocation embedded within the Tk300,000 crore Annual Development Programme (ADP).
Block allocations are contingency funds set aside in the national budget for spending on projects or purposes to be determined later, a practice that open scope for misuse and also criticised for reducing transparency and parliamentary oversight over public expenditure.
According to the circular, government has suspended spending on the purchase of cars, motorcycles and water transport vehicles. However, exemptions will apply to replacement vehicles that have exceeded their approved lifespan, procurement of full electric vehicles and vehicles needed for newly established government offices, subject to approval from relevant authorities.
The purchase of all types of aircraft, including aeroplanes, helicopters and drones, has also been suspended.
Spending on government residential buildings has been restricted also. Construction of new government buildings will remain halted, except for essential repair and maintenance works.
Similar restrictions have been imposed on development projects. Vehicle purchases under development budgets will remain suspended, although vehicles essential for project implementation and replacement of outdated vehicles will be permitted.
The government has also put a halt on land acquisition under development programmes, except in cases where land is necessary for project implementation and receives approval from the Planning Commission.
The Finance Division has also restricted overseas travel funded by government budgets.
Officials will not be allowed to join foreign training, seminars, workshops, symposiums and study tours financed from government revenue sources. Foreign training programmes funded under development cooperation agreements with partner countries, universities or institutions have also been suspended.
However, participation in foreign training programmes financed through grants or assistance from foreign governments, institutions or development partners will continue to be allowed.
The circular also permits foreign components of military and civilian training programmes organised by training institutes through universities or relevant institutions.
The budget allocates Tk2,180 crore for foreign travel.
The government has allowed overseas participation in mandatory Pre-shipment Inspection (PSI) and Factory Acceptance Test (FAT) programmes for imported goods where such inspections are unavoidable. In such cases, ministries and divisions have been advised to use internationally recognised certified organisations whenever possible.
The Finance Division circular instructed all government agencies to ensure “Value for Money” while implementing budgetary programmes.
Officials said the spending restrictions are part of broader efforts to strengthen fiscal discipline at a time when the economy is facing pressure from limited resources, higher expenditure demands and the need to maintain macroeconomic stability.
Mohammad Showkat Ullah, deputy secretary of the Finance Ministry (Expenditure Management-4), said the move, that will save huge a significant amount of money, carries a message for the country.
He, however, could not give any idea about how much budget the government could save from the initiative. “We will sit for more meetings. We can give you an idea about the amount after that,” he told TIMES of Bangladesh, giving an idea that the amount could be several thousands of crores.
The circular, signed by Deputy Secretary Md Zakir Hossain, has been sent to all ministries, divisions and relevant government agencies for implementation.
