Government devises strategy to streamline budget allocations

April 9, 2019: The government has been working on a comprehensive strategy to streamline budget allocations for each ministry with an aim to reduce expenditure rigidities.

A draft medium-term framework “A Roadmap for Stability, Growth and Productive Employment” released by the government says that rather than providing budgetary funds to the line ministries in itemized details, the budget allocations for each ministry will be made under only two heads including employee related expenses and single line item for all operational spending.

According to the framework, this would be an important step towards ultimate removal of artificial distinction between recurrent and development expenditure.

This would open the possibility of delegation planning and development functions to line ministries, the document added.

It said that such a move would reduce expenditure rigidities, provide line ministries a greater control over their budgets, and enhance accountability of expenditure management system.

In addition, it added, the Principal Accounting Officer (PAO), assisted by the Chief Financial officer (CFO), would be empowered to run the operational expenses without prior approval of the ministry of finance except in case of acquisition of assets.

In addition, all supplementary grants would require prior parliamentary approval, it added.

The computer based Financial Accounting and Budgeting System (FABS) would be used not only for transactions but also as a tool for decision-making.

The system would be fully interlinked among all stakeholders and participants, gaps filled, and the system capabilities enhanced, coverage extended, and functionalities added; both standardized as well as tailor-made reports would be easily accessible from the dash boards.

It is pertinent to mention here that the government launched the Medium-Term Economic Framework (MTEF), which has been developed on inputs from the Prime Minister Economic Advisory Council (EAC) and development partners including World Bank and Asian Development Bank.

Three main sectors of economy has been specially highlighted in the report that have constrained Pakistan’s growth potential and caused cycles of balance of payment crisis.

These include the Revenue-Expenditure gap, the Saving-Investment gap and the Export-Import gap.

The MTEF report showcases the government’s strategy to deal with these three structural imbalances and putting the economy on the path to sustainable growth and job creation.

The framework would be shared with the standing committees of the parliament for feedback and proposals and would be finalized shortly.

(APP)