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Business Recorder
26-05-2025
- Business
- Business Recorder
Pakistan FY26 budget may envisage Rs1.079trn power subsidy
ISLAMABAD: The government is likely to earmark an amount of Rs 1.079 trillion subsidy for the power sector for the fiscal year 2025-26 against Rs 1.190 trillion for FY 2024-25, well informed sources in Finance Division told Business Recorder. These figures have been finalized in recent meetings between the government's economic team and International Monetary Fund (IMF) Mission. Finance Division has also conveyed revised provisional Indicative Budget Ceilings (IDCs) of Rs 636.136 billion for sector subsidy on account of recurrent budget for 2025-26. Earlier, this amount was Rs 400 billion. Extra subsidy needs: MoF asks ministry to allocate Rs50bn for PD to secure TSG Since details of revised amount of subsidy for power sector for FY 2024-25 are not available it is not known if entire allocation has been consumed by the Power Division or there was some deviation. Finance Division has also asked Power Division to comply with mandatory instructions strictly and fully by all Principal Accounting Officers (PAOs), heads of departments and bodies /entities while preparing budget estimates for each cost centre and head of accounts. The following instructions have to be followed :(i) PAOs are required to comply with the provisions of the PFM Act, 2019 regarding performance-based budgeting and expenditures by formulating well defined plans; (ii) guidelines and procedures contained in Financial Management and Powers of PAOs Regulations, 2021 and the BCC for FY 2025-26 shall be adhered to ;(iii) ensure adoption of Single Account (TSA) as per Section 30 of the PFM Act, 2019 read with Cash Management & TSA Rules, 2024; (iv) for Climate Sensitive Budgeting / Green Budgeting the information has to be filled for both current and development budget as per the typology defined in Form-IV. The cost centres related to green component shall also be identified while submitting the BOs/NISs; (v) KPIs related to gender and climate may also be identified separately in Performance-Based Budge-ting (Form-1); (vi) PAOs, Heads of Departments and Bodies / Entities shall submit quarter-wise budget estimates for FY 2025-26; (vii) PAOs shall make expenditures keeping in view the budgetary allocations without any assumption of additional allocation during the financial year. Supplementary budget, regular and technical, shall not be provided; (viii) austerity measures, as issued by Finance Division from time to time, shall be fully adhered to. No allocations shall be made for banned heads of expenditures. Such allocation, if made, shall be approved by the austerity committee; and (ix) ensure full allocation of rupee cover again leased after approval of for will be adjusted from within the funds provided, anticipated foreign grants subsequently requested. Recently, Finance Division had conveyed to Power Division that the allocation of power sector subsidies for the fiscal year 2025-26 will depend on the availability of fiscal space. In a letter titled 'MEFP for EFF 2024-27 – Circular Debt (CD) Target for FY 2025-26,' the Power Division had sought indicative allocations for the upcoming fiscal year to bridge the circular debt gap. According to the Corporate Finance (CF) Wing of the Finance Division, budgetary allocations for the power sector in FY 2025-26 will be finalized through the standard budgetary process in consultation with the Budget and CF Wings of the Finance Division, keeping in view the prevailing fiscal constraints. Finance Ministry did not endorse the Power Division's proposal to release an advance subsidy of Rs224 billion to address power sector cash flow and liquidity concerns, arguing that adequate funds have already been provided. On March 25, 2025, the Power Division shared a draft summary with the Finance Ministry for submission to the Economic Coordination Committee (ECC), requesting the release of the advance subsidy. However, the Finance Division responded that sufficient funds—amounting to Rs633 billion—had already been allocated under various budgetary heads in line with the Power Division's requirements. Copyright Business Recorder, 2025
Business Recorder
26-05-2025
- Business
- Business Recorder
FY26 budget may envisage Rs1.079trn power subsidy
ISLAMABAD: The government is likely to earmark an amount of Rs 1.079 trillion subsidy for the power sector for the fiscal year 2025-26 against Rs 1.190 trillion for FY 2024-25, well informed sources in Finance Division told Business Recorder. These figures have been finalized in recent meetings between the Government's economic team and International Monetary Fund (IMF) Mission. Finance Division has also conveyed revised provisional Indicative Budget Ceilings (IDCs) of Rs 636.136 billion for sector subsidy on account of recurrent budget for 2025-26. Earlier, this amount was Rs 400 billion. Extra subsidy needs: MoF asks ministry to allocate Rs50bn for PD to secure TSG Since details of revised amount of subsidy for power sector for FY 2024-25 are not available it is not known if entire allocation has been consumed by the Power Division or there was some deviation. Finance Division has also asked Power Division to comply with mandatory instructions strictly and fully by all Principal Accounting Officers (PAOs), heads of departments and bodies /entities while preparing budget estimates for each cost centre and head of accounts. The following instructions have to be followed :(i) PAOs are required to comply with the provisions of the PFM Act, 2019 regarding performance-based budgeting and expenditures by formulating well defined plans; (ii) guidelines and procedures contained in Financial Management and Powers of PAOs Regulations, 2021 and the BCC for FY 2025-26 shall be adhered to ;(iii) ensure adoption of Single Account (TSA) as per Section 30 of the PFM Act, 2019 read with Cash Management & TSA Rules, 2024; (iv) for Climate Sensitive Budgeting / Green Budgeting the information has to be filled for both current and development budget as per the typology defined in Form-IV. The cost centres related to green component shall also be identified while submitting the BOs/NISs; (v) KPIs related to gender and climate may also be identified separately in Performance-Based Budge-ting (Form-1); (vi) PAOs, Heads of Departments and Bodies / Entities shall submit quarter-wise budget estimates for FY 2025-26; (vii) PAOs shall make expenditures keeping in view the budgetary allocations without any assumption of additional allocation during the financial year. Supplementary budget, regular and technical, shall not be provided; (viii) austerity measures, as issued by Finance Division from time to time, shall be fully adhered to. No allocations shall be made for banned heads of expenditures. Such allocation, if made, shall be approved by the austerity committee; and (ix) ensure full allocation of rupee cover again leased after approval of for will be adjusted from within the funds provided, anticipated foreign grants subsequently requested. Recently, Finance Division had conveyed to Power Division that the allocation of power sector subsidies for the fiscal year 2025-26 will depend on the availability of fiscal space. In a letter titled 'MEFP for EFF 2024-27 – Circular Debt (CD) Target for FY 2025-26,' the Power Division had sought indicative allocations for the upcoming fiscal year to bridge the circular debt gap. According to the Corporate Finance (CF) Wing of the Finance Division, budgetary allocations for the power sector in FY 2025-26 will be finalized through the standard budgetary process in consultation with the Budget and CF Wings of the Finance Division, keeping in view the prevailing fiscal constraints. Finance Ministry did not endorse the Power Division's proposal to release an advance subsidy of Rs224 billion to address power sector cash flow and liquidity concerns, arguing that adequate funds have already been provided. On March 25, 2025, the Power Division shared a draft summary with the Finance Ministry for submission to the Economic Coordination Committee (ECC), requesting the release of the advance subsidy. However, the Finance Division responded that sufficient funds—amounting to Rs633 billion—had already been allocated under various budgetary heads in line with the Power Division's requirements. Copyright Business Recorder, 2025
Business Recorder
10-05-2025
- Business
- Business Recorder
Rs757m allocated as provisional IBCs for PD
ISLAMABAD: Finance Division has reportedly allocated Rs757.336 million as provisional Indicative Budget Ceilings (IBCs) for Employees' Related Expenses (ERE) and non-ERE expenses for Power Division for the financial year 2025-26. Of the total amount of 757.336 million, Rs 399.004 million are related to ERE whereas Rs 358.322 million for non-ERE. Documents available with this correspondent say that 'ERE and Non-ERE allocation is for main Division, attached Departments and Subordinate Offices. Any allocations for Grant-in-Aid to Autonomous Bodies and Entities shall be kept at bare minimum only to meet their budgetary shortfall for a limited period of time as non-recurring expenditure. As per approved policy and in line with sound budget making principles, Finance Division shall consider any requests for increase in any allowance of any other benefit, perk and privileges only as part of annual federal budget making process. Non-ERE allocation takes into account impact of inflation, exchange rate and other specific factors on operating expenses.' According to Finance Division, following mandatory instructions shall be strictly and fully followed by all PAOs, Heads of Departments and Bodies/ Entities while preparing budget estimates for each cost centre and head of accounts in the form of Budget Orders(BOs) and New Item Statements (NlSs): (i) PAOs are required to comply with the provisions of the PFM Act, 2019 regarding performance-based budgeting and expenditures by formulating well-defined plans; (ii) guidelines and procedures contained in Financial Management and Powers of PAOs Regulations, 2021 and the BCC for FY 2025-26 shall be adhered to; (iii) ensure adoption of Treasury Single Account (TSA) as per Section 30 of the PFM Act, 2019 read with Cash Management & TSA Rules, 2024; (iv) IBCS for development budget, where applicable, will be shared separately by the Planning, Development & Special Initiatives Division; (v) Employee-Related Expenses (ERE) for the cost centres/ heads of accounts of the main Division, Attached Departments and Sub-ordinate Offices shall be protected for the full financial year within the respective IBCs in BOs/ NISs; (vi) ERE expenditure shall only include the budget estimates against filled posts as there is a ban on creation of new posts and all the posts lying vacant for three years shall be abolished forthwith; (vii) for Gender Responsive Budgeting, PAOs, Heads of Departments and Bodies /Entities are required to fill the respective forms including BOs/ NISs, whereby, specifying gender wise, planned expenditure based on gender budget tagging; (viii) for Climate Sensitive Budgeting/ Green Budgeting the information has to be filled for both current and development budget as per the typology defined in Form-IV. The cost centres related to green component shall also be identified based on climate budget tagging for RoCG, PSDP, Grants, Subsidies and Revenues while submitting the BOs/ NISs; (ix) KPIs related to gender and climate may also be identified separately in Performance-Based Budgeting (Form-1); (x) PAOs, Heads of Departments and Bodies/ Entities shall submit Quarter-wise Budget Estimates (Form-XV) for FY 2025-26; (xi) PAOs shall make expenditures keeping in view the budgetary allocations without any assumption of additional allocation during the financial year. Supplementary budget, regular and technical, shall not be provided except in exceptional circumstances after approval of the ECC and the Cabinet; (xii) PAOs, Heads of Departments and Bodies/ Entities shall ensure approval of budgets, both revenue and expenditure, as provided for in respective laws in case of autonomous bodies and other entities. PAOs shall also ensure that autonomous bodies and other entities generate sufficient revenues from sources defined in their respective statutes and curtail expenditure for financial self-sustainability; (xiii) Autonomous Body's Budget for FY 2025-26 is required to be submitted under following detailed object heads as these are purely related to autonomous bodies; (xiv) no allocations shall be made for keeping any head of account operative, both ERE and Non-ERE; (xv) austerity measures, as issued by Finance Division from time to time, shall be fully adhered to. No allocations shall be made for banned heads of expenditures. Such allocation, if made, shall be released after approval of the austerity committee; ( xvi) ensure full allocation of rupee cover against all anticipated foreign grants and loans during the financial year. Any allocation subsequently requested for will be adjusted from within the funds provided; and (xvii) sufficient funds shall be allocated from Non-ERE budget for essential payments like court cases, assistance to families of employees who die in service, capacity building and trainings, maintenance of assets and for clearance of liabilities; Review international subscriptions, contributions; etc., to prevent unnecessary outflow of foreign exchange. Secretaries of all Divisions have been asked to prepare Budget Orders (BOs)/New Item Statements (NISs) and Post Performa and submit the same to Director (Budget Computerization), Budget Wing, Finance Division for entry into SAP system along with Forms related to Performance Based Budgeting from May 10, 2025 (today). Copyright Business Recorder, 2025
Zawya
25-04-2025
- Business
- Zawya
Finance Minister Outlines Measures to Tackle Ghana's Large Payable Build-up in 2024
Finance Minister Dr. Cassiel Ato Forson has outlined a comprehensive plan to investors aimed at addressing the country's large accumulation of government payables in 2024, while reinforcing fiscal discipline and transparency across public financial management. Speaking at meeting with investors in Washington DC, USA, Dr. Forson highlighted key reforms and policy actions underway to restore confidence in Ghana's fiscal framework and stabilize its macroeconomic outlook. Auditing Payables&Commitments At the heart of the plan is a government-commissioned audit of all outstanding payables and commitments. The Ministry of Finance has engaged the Auditor General, alongside two independent audit firms, for an intensive eight-week review. 'The objective is to verify the legitimacy and accuracy of these claims,' the Minister explained. 'The findings will guide the implementation of corrective actions to resolve any irregularities and improve accountability going forward.' Strengthening Commitment Controls To prevent the recurrence of unapproved expenditures, the government has amended the Procurement Act. Effective April 3, 2025, no government contract will be approved without prior commitment authorization from the Ministry of Finance. 'This measure is critical for enhancing spending controls and ensuring full compliance with the Public Financial Management (PFM) Act,' the Minister said. PFM Act Amendment and Fiscal Rules The government has also amended the Public Financial Management Act, 2016 (Act 921), to introduce two major fiscal rules. The first is a debt rule that targets a reduction in the debt-to-GDP ratio to 45% by 2035. The second is an operational rule mandating an annual primary surplus of at least 1.5% of GDP on a commitment basis. An Independent Fiscal Council has been established to monitor adherence to these rules and to enhance transparency and credibility in public finance. Enforcing Compliance and Oversight In a further move to institutionalize fiscal discipline, the Ministry has operationalized a new Compliance Division tasked with monitoring how Ministries, Departments, and Agencies (MDAs) adhere to fiscal commitments. A newly appointed Director is now leading the division's efforts. Additionally, the government will introduce a Public Financial Management Commitment Control Compliance League Table to publicly rank MDAs based on their expenditure control performance. Restoring Confidence 'These actions underscore our commitment to resolving legacy financial obligations, enforcing spending discipline, and creating a transparent and credible financial management system,' the Finance Minister said, assuring investors of the government's resolve to maintain stability and support long-term growth. Distributed by APO Group on behalf of Ministry of Finance - Republic of Ghana.
