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Business Recorder
11-07-2025
- Business
- Business Recorder
Development budget: Finance Division unveils strategy for release of funds
ISLAMABAD: Finance Division unveiled the strategy for release of funds for development and recurrent budget for fiscal year 2025-26, adding that all releases shall be subject to availability of fiscal space. The Division issued an office memorandum (OM) which stated that the funds release strategy for development budget for fiscal year 2025-26 is being issued for implementation with immediate effect and till further orders. Funds for development budget shall be authorised by the Planning, Development and Special Initiatives (PD&SI) Division out of the Public Sector Development Programme (PSDP) allocation for fiscal year 2025-26 for approved projects at 15 percent for Quarter 1, 20 percent for Quarter 2, 25 percent for Quarter 3, and 40 percent for Quarter 4. Employees-related expenditures (ERE) and pension payments at 25 percent for each quarter. Non-employee related expenditures (Non-ERE) at 15 percent for Quarter 1, 25 percent for Quarter 2 and Quarter 3 each, and 35 percent for Quarter 4. Rent of office and residential buildings, commuted value of pension, encashment of LPR and PM Assistance Packages at 45 percent during 1st half of current fiscal year and 55 percent in 2nd half. Austerity plan: Finance Division bans vehicle purchases, new posts Allocated funds for recurrent budget shall be released for fiscal year 2025-26 by Finance Division under demands for grants and appropriations at 20 percent for Quarter 1, 25 percent for Quarter 2 and quarter 3 each, and 30 percent for Quarter 4. Notwithstanding anything contained in this strategy, all releases shall be subject to availability of fiscal space, it added. While executing development projects, PD&SI Division and PAOs concerned shall ensure adherence to provisions of the Public Finance Management Act, 2019. PD&SI Division shall 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 i. above shall be considered by budget wing, Finance Division on case-to-case basis and shall require prior approval of finance secretary. The strategy noted that release of funds for approved projects in the demand for grants and appropriations shall be made by PAOs in each quarter as authorised by the PD&SI Division within the above limits. PAOs shall ensure availability of sufficient funds for employee-related expenses for each project. PAOs/Heads of attached departments/heads of sub-ordinate offices/project directors shall not re-appropriate funds from employee related expenditures to non-employee related expenditures (heads of account) except with prior concurrence of PD&SI Division. Adequate budgetary allocations on account of foreign exchange component (rupee cover) shall be ensured by all PAOs and conveyed to PD&SI Division, Economic Affairs Division and Finance Division. Funds for foreign exchange payments shall require prior approval of External Finance Wing, Finance Division. All payments shall 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 shall be opened for each project. No direct payment through SBP shall be made except with prior approval of finance secretary as per Rules 3(9) and (10) of the Cash Management & Treasury Single Account Rules, 2024. Instructions with regard to supplementary grants, technical supplementary grants and re-appropriation of funds shall be issued by Budget Wing, Finance Division separately. There shall be no requirement of ways and means clearance from Budget Wing, Finance Division for the release of development budget. No payment shall be made over and above the limits by any accounting office except with prior written approval of Finance Division; and Development Wing, Finance Division shall coordinate and oversee matters relating to the release of funds for the development budget and other ancillary matters. The Finance Division shall release subsidies, grants and lending on case-by-case basis. Cases of international and domestic contractual obligations and obligatory payments beyond the above prescribed limits shall be considered on case-by-case basis by Finance Division; and PAOs/Heads of Attached Departments/Heads of Subordinate Offices shall 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 2025 announced in the budget under a separate cost centre. The Finance Division shall release 100 per cent of these funds in Quarter 3. The PAOs are advised to re-appropriate these funds, if needed, in consultation with Expenditure Wing, Finance Division. Guidelines and instructions below shall be strictly adhered to: Grants-in-Aid: i. Funds released under para 2 to autonomous bodies, authorities, commissions etc. shall be subject to following conditions: a. PAOs shall ensure approval of annual budgets of autonomous bodies/authorities/ commissions/funds/boards etc by competent authority under respective statutes, rules or regulations; and b. A certificate to the effect of such approval shall be communicated to Expenditure Wing, Finance Division. Autonomous bodies/authorities/commissions/funds/boards etc. shall provide budget information on detailed object-wise classification along with their receipts. PAOs must ensure adherence to the Grants-in-Aid Rules, 2025. Adequate allocation of funds may be made for meeting expenses of autonomous bodies/authorities/commissions/funds/boards etc. Allocation and disbursement of funds to public and private entities shall be linked to outputs, outcomes and performance; and Grants-in-Aid shall be considered non-recurring and funds shall be disbursed only to meet any justified shortfall for a limited time. Grants and Subsidies: Grants and subsidies shall be processed by relevant wings of Finance Division in consultation with Budget Wing. PAOs shall prepare quarterly funds requirement/cash plan for subsidies within and communicate the same to relevant wings of Finance Division before start of each quarter. For release of funds as per approved cash plan, PAOs shall approach the relevant Wings of Finance Division. The release shall be made with concurrence of Budget Wing. Any deviation from the approved cash plan, shall also be submitted, in consultation with Budget Wing, for approval of Finance Secretary. Sanction of expenditure for subsidies by the PAOs shall be granted with prior concurrence of Expenditure Wing and copies will be sent to Budget Wing, AGPR and all concerned. PAOs shall approach Expenditure Wing, Finance Division, for release of funds for grants. Lending: Disbursement of funds on account of loans and advances and investments shall 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 shall ensure at source deductions; and Release shall be made with the approval of Finance Secretary. Sanction letter shall be issued to AGPR with a copy to Budget Wing. Copyright Business Recorder, 2025
Business Recorder
10-07-2025
- Business
- Business Recorder
Development budget: FD releases strategy for release of funds
ISLAMABAD: Finance Division released the strategy for release of funds for development and recurrent budget for fiscal year 2025-26, adding that all releases shall be subject to availability of fiscal space. The Division issued an office memorandum (OM) which stated that the funds release strategy for development budget for fiscal year 2025-26 is being issued for implementation with immediate effect and till further orders. Funds for development budget shall be authorised by the Planning, Development and Special Initiatives (PD&SI) Division out of the Public Sector Development Programme (PSDP) allocation for fiscal year 2025-26 for approved projects at 15 percent for Quarter 1, 20 percent for Quarter 2, 25 percent for Quarter 3, and 40 percent for Quarter 4. Employees-related expenditures (ERE) and pension payments at 25 percent for each quarter. Non-employee related expenditures (Non-ERE) at 15 percent for Quarter 1, 25 percent for Quarter 2 and Quarter 3 each, and 35 percent for Quarter 4. Rent of office and residential buildings, commuted value of pension, encashment of LPR and PM Assistance Packages at 45 percent during 1st half of current fiscal year and 55 percent in 2nd half. Austerity plan: Finance Division bans vehicle purchases, new posts Allocated funds for recurrent budget shall be released for fiscal year 2025-26 by Finance Division under demands for grants and appropriations at 20 percent for Quarter 1, 25 percent for Quarter 2 and quarter 3 each, and 30 percent for Quarter 4. Notwithstanding anything contained in this strategy, all releases shall be subject to availability of fiscal space, it added. While executing development projects, PD&SI Division and PAOs concerned shall ensure adherence to provisions of the Public Finance Management Act, 2019. PD&SI Division shall 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 i. above shall be considered by budget wing, Finance Division on case-to-case basis and shall require prior approval of finance secretary. The strategy noted that release of funds for approved projects in the demand for grants and appropriations shall be made by PAOs in each quarter as authorised by the PD&SI Division within the above limits. PAOs shall ensure availability of sufficient funds for employee-related expenses for each project. PAOs/Heads of attached departments/heads of sub-ordinate offices/project directors shall not re-appropriate funds from employee related expenditures to non-employee related expenditures (heads of account) except with prior concurrence of PD&SI Division. Adequate budgetary allocations on account of foreign exchange component (rupee cover) shall be ensured by all PAOs and conveyed to PD&SI Division, Economic Affairs Division and Finance Division. Funds for foreign exchange payments shall require prior approval of External Finance Wing, Finance Division. All payments shall 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 shall be opened for each project. No direct payment through SBP shall be made except with prior approval of finance secretary as per Rules 3(9) and (10) of the Cash Management & Treasury Single Account Rules, 2024. Instructions with regard to supplementary grants, technical supplementary grants and re-appropriation of funds shall be issued by Budget Wing, Finance Division separately. There shall be no requirement of ways and means clearance from Budget Wing, Finance Division for the release of development budget. No payment shall be made over and above the limits by any accounting office except with prior written approval of Finance Division; and Development Wing, Finance Division shall coordinate and oversee matters relating to the release of funds for the development budget and other ancillary matters. The Finance Division shall release subsidies, grants and lending on case-by-case basis. Cases of international and domestic contractual obligations and obligatory payments beyond the above prescribed limits shall be considered on case-by-case basis by Finance Division; and PAOs/Heads of Attached Departments/Heads of Subordinate Offices shall 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 2025 announced in the budget under a separate cost centre. The Finance Division shall release 100 per cent of these funds in Quarter 3. The PAOs are advised to re-appropriate these funds, if needed, in consultation with Expenditure Wing, Finance Division. Guidelines and instructions below shall be strictly adhered to: Grants-in-Aid: i. Funds released under para 2 to autonomous bodies, authorities, commissions etc. shall be subject to following conditions: a. PAOs shall ensure approval of annual budgets of autonomous bodies/authorities/ commissions/funds/boards etc by competent authority under respective statutes, rules or regulations; and b. A certificate to the effect of such approval shall be communicated to Expenditure Wing, Finance Division. Autonomous bodies/authorities/commissions/funds/boards etc. shall provide budget information on detailed object-wise classification along with their receipts. PAOs must ensure adherence to the Grants-in-Aid Rules, 2025. Adequate allocation of funds may be made for meeting expenses of autonomous bodies/authorities/commissions/funds/boards etc. Allocation and disbursement of funds to public and private entities shall be linked to outputs, outcomes and performance; and Grants-in-Aid shall be considered non-recurring and funds shall be disbursed only to meet any justified shortfall for a limited time. Grants and Subsidies: Grants and subsidies shall be processed by relevant wings of Finance Division in consultation with Budget Wing. PAOs shall prepare quarterly funds requirement/cash plan for subsidies within and communicate the same to relevant wings of Finance Division before start of each quarter. For release of funds as per approved cash plan, PAOs shall approach the relevant Wings of Finance Division. The release shall be made with concurrence of Budget Wing. Any deviation from the approved cash plan, shall also be submitted, in consultation with Budget Wing, for approval of Finance Secretary. Sanction of expenditure for subsidies by the PAOs shall be granted with prior concurrence of Expenditure Wing and copies will be sent to Budget Wing, AGPR and all concerned. PAOs shall approach Expenditure Wing, Finance Division, for release of funds for grants. Lending: Disbursement of funds on account of loans and advances and investments shall 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 shall ensure at source deductions; and Release shall be made with the approval of Finance Secretary. Sanction letter shall be issued to AGPR with a copy to Budget Wing. Copyright Business Recorder, 2025
