Finance ministry unveils quarterly fund release plan

The Ministry of Finance has devised a strategy for the release of development and recurrent budgets for the current fiscal year 2026-27.

 

The funds for the development budget would be authorised by the Planning, Development & Special Initiatives (PD&SI) Division out of the PSDP allocation for FY 2026-27 for approved projects at 15pc for Quarter 1, 20pc for Quarter 2, 25pc for Quarter 3, and 40pc for Quarter 4 of the current fiscal year.

 

While executing development projects, the PD&SI Division and Principal Accounting Officers (PAOs) concerned would ensure adherence to provisions of the Public Finance Management Act, 2019. The PD&SI Division would devise a quarterly sector/ project/ division-wise strategy for release of PSDP funds within the approved appropriations.

 

Any proposal for change to the quarterly limits prescribed at above would be considered by the Budget Wing, Finance Division while members raised concerns over tax transparency.

 

At the outset of the meeting, the committee was briefed on tax collection from the tobacco industry. FBR officials informed the sub-committee that there were 35 tobacco companies operating in the country with multiple brands.

 

Officials stated that a letter had been sent to the Ministry of Law and Justice to obtain the opinion whether or not the taxation records of tobacco companies be shared with the committee. The committee was informed that factories operating in the tax exempted areas previously enjoyed income tax exemptions, which had been ended with on case-to-case basis and would require prior approval of finance secretary. The release of funds for approved projects in the demand for grants and appropriations would be made by the PAOs in each quarter as authorised by the PD&SI Division within the above limits.

 

The PAOs would ensure availability of sufficient funds for employee related expenses for each project. The PAOs/Heads of Attached Departments/Heads of Subordinate Offices/Project Directors would not re-appropriate funds from employee related expenditures to non-employee related expenditures (heads of account) except for with prior concurrence of PD&SI Division.

 

The adequate budgetary allocations on account of foreign exchange component (rupee cover) would be ensured by all PAOs and conveyed to PD&SI Division, Economic Affairs Division and Finance Division. The funds for foreign exchange payments would require prior approval of External Finance Wing, Finance Division.

 

All payments would be made through the pre-audit system or through the Assignment Account Procedure, or any other procedure issued by Finance Division from time to time. A separate Assignment Account would be opened for each project. No direct payment through SBP would be made except for with prior approval of Finance Secretary as per Rules 3(9) and (10) of the Cash Management & Treasury Single Account Rules, 2024.

 

The provisions of the Public Finance Management Act, 2019, the Financial Management & Powers of Principal Accounting Officers Regulations, 2021 and instructions issued by PD&SI Division would be strictly adhered to by all PAOs and accounting offices.

 

The instructions with regard to supplementary grants, technical supplementary grants and re-appropriation of funds would be issued by Budget Wing, Finance Division separately. There would be no requirement of ways and means clearance from Budget Wing, Finance Division for the release of development budget. No payment would be made over and above the limits by any accounting office except for with prior written approval of Finance Division. Development Wing, Finance Division would coordinate and oversee matters relating to the release of funds for the development budget and other ancillary matters.

 

For recurrent budget, the allocated funds for recurrent budget would be released for FY2026-27 by Finance Division under all Demands for Grants and Appropriations at 20pc for Quarter 1, 25pc for Quarter 2 and Quarter 3 each, and 30pc for Quarter 4.

 

Employees related expenditures (ERE) and pension payments at 25pc for each Quarter. Non-employee related expenditures (Non-ERE) at 15pc for Quarter 1, 25pc for Quarter 2 and Quarter 3 each, and 35pc for Quarter 4. The rent of office and residential buildings, commuted value of pension, encashment of LPR and PM Assistance Packages at 45pc during 1st half of CFY and 55pc in 2nd half of CFY.

 

The Finance Division would release subsidies, grants and lending on case-by-case basis. The cases of international and domestic contractual obligations and obligatory payments beyond the above prescribed limits would be considered on case-by-case basis by Finance Division. The PAOs/Heads of Attached Departments/Heads of Subordinate Offices would not make re-appropriation of allocated funds from ERE to Non-ERE without prior concurrence of Finance Division. The PAOs have been provided additional funds to meet funding requirements of Ad-hoc Relief Allowance 2026 announced in the budget under a separate cost centre. The Finance Division would release 100pc of these funds in Quarter 3. The PAOs are advised to re-appropriate these funds only for the purpose of Ad-hoc Relief Allowance in quarter 3 of CFY, if needed, in consultation with Expenditure Wing, Finance Division.

 

Disbursement of funds on account of loans & advances and investments would be subject to the condition that all due repayments to the Federal Government have been made as per schedule/ maturities. In case, due repayments have not been made, relevant Wing of Finance Division would ensure at source deductions. The release of funds would be made with the approval of Finance Secretary.

 

For recurrent budget, Funds for Development Budget would be authorised by the Planning, Development & Special Initiatives (PD&SI) Division out of the PSDP allocation for FY2026-27 for approved projects at 15pc for Quarter 1, 20pc for Quarter 2, 25pc for Quarter 3, and 40pc for Quarter 4.

Source: The International News Pakistan