The Finance Division on Saturday denied the government issuing instructions to stop pension and salary payments, deeming reports to the contrary “completely false”.

The clarification comes after The News International reported that the Accountant General of Pakistan Revenue (AGPR) had been told by the finance ministry to “stop clearing all federal ministries and attached department’s bills until further orders”.

“Even the clearance of salary bills has also been stopped,” claimed the report, which quoted “top official sources” as saying that “operational cost-related releases faced difficulties mainly because of lingering financial difficulties being faced by the country.”

However, a press release — a copy of which is available with Dawn. com — issued from the Finance Division today rejected the story, saying: “There are rumours floating around that the government has instructed to stop payment of pay, pension, etc. This is completely false as no such instructions have been given by Finance Division, which is the concerned federal ministry.”

It added that the accountant general of Pakistan revenue (AGPR) has “confirmed that pay and pension have already been processed and will be paid on time.”

The press release further said that other payments were also being processed as per routine.

Finance Minister Ishaq Dar said the “fake news” was being spread to “cause harm to the national economic interests”.

“Kindly refrain from circulating such reports and news without verifying from the concerned ministry,” he urged the people.

The development comes amid a precarious economic situation for the country where the government is in a race against time to implement tax measures and reach an agreement with the International Monetary Fund (IMF) as the country’s reserves depleted to around $3 billion, which experts believe is enough for only 16 or 17 days of imports.

The agreement with the IMF on the completion of the ninth review of a $7bn loan programme would not only lead to a disbursement of $1.2bn but also unlock inflows from friendly countries.

Prime Minister Shehbaz Sharif on Wednesday had also announced a slew of austerity measures, which he claimed would save the country Rs200bn annually. Pakistan is in dire need of funds as it battles a worsening economic crisis.

Dar rejects rumours of default

Later in the day, the finance minister categorically rejected rumours about the country defaulting in a special meeting of the Senate’s Business Advisory Committee.

According to a handout issued by the Senate Secretariat, Dar said that “even though economic hardships are present, there is no risk of a default”.

Dar added that effective government policies would help overcome difficulties.

“The nation needs to adopt austerity measures and control their expenditures,” he said, adding that unnecessary expenses should be avoided.

Addressing the participants of the meeting, Dar also highlighted that the financial team was working round the clock and assured that the country would come out of the prevailing crisis.

On the occasion, Senate Chairman Sadiq Sanjrani said difficult decisions had to be taken in light of the economic hardships being faced by the country.

Participants of the committee said the government treasury should not be burdened with additional costs.

The committee members advised imposing a ban for at least three months on parliamentarians’ travelling abroad, adding that permission could be granted if the trip was deemed absolutely necessary.

Chairman Sanjrani said the amount of fuel allocated for chairpersons of standing committees will be reduced.

He also decided that senate employees will not receive any additional honorarium in the current fiscal year.

Senator Maulana Abdul Ghafoor Hyderi said austerity measures should also be taken for the civil bureaucracy.