Finance Ministry Announces Fund Release Strategy for Development and Recurrent Budgets FY 2024-25

Pakistan’s Finance Ministry Unveils New Fund Release Strategy for Fiscal Year 2024-25

Islamabad, July 13, 2024 – In a significant move aimed at streamlining the allocation and utilization of funds, the Ministry of Finance has announced a comprehensive strategy for the release of funds for both development and recurrent budgets for the fiscal year 2024-25. This new strategy, effective immediately, is set to ensure a more disciplined and efficient management of the country’s financial resources.

For the Development Budget, the Planning, Development and Special Initiatives (PD&SI) Division will oversee the fund releases, adhering to a structured quarterly plan. The allocation will follow a progressive increase throughout the year, starting with 15 percent in the first quarter, followed by 20 percent, 25 percent, and a significant 40 percent in the final quarter. This phased approach aims to facilitate a steady flow of funds for approved projects under the Public Sector Development Program (PSDP), ensuring timely and efficient execution.

The PD&SI Division, along with Project Accounting Offices (PAOs), is tasked with the meticulous implementation of the Public Finance Management Act, 2019, to uphold transparency and accountability in the utilization of funds. Moreover, the division is to devise a detailed quarterly strategy for the sector-wise and project-wise release of funds, ensuring that each project receives the necessary financial support for its execution.

In terms of the Recurrent Budget, the Finance Division has outlined a similar phased release of funds, with allocations set at 20 percent for the first quarter, 25 percent for the second and third quarters each, and 30 percent for the final quarter. This structured release is designed to cover the operational expenses of various divisions, attached departments, subordinate offices, and other entities such as autonomous bodies and commissions.

Additionally, the Finance Division has made provisions for the Adhoc Relief Allowance 2024, with 100 percent of these funds to be released in the third quarter. PAOs are advised to judiciously re-appropriate these funds for the intended purpose, ensuring that the relief allowance reaches its beneficiaries without delay.

The ministry has also laid down clear guidelines for the management of subsidies, requiring PAOs to prepare a quarterly cash plan within their allocated budgets. This proactive planning is expected to facilitate smoother fund releases in line with the approved cash plans, thereby avoiding fiscal bottlenecks.

In a bid to enhance fiscal discipline, the ministry has emphasized that no payments shall be made over the approved limits without prior written approval from the Finance Division. This directive aims to curb unauthorized expenditures and ensure that financial resources are directed towards their intended purposes.

This strategic overhaul of the fund release mechanism is a testament to the government’s commitment to fiscal responsibility and efficient public finance management. By ensuring a structured and disciplined approach to budget allocation and expenditure, the Ministry of Finance aims to bolster the country’s economic stability and support sustainable development.

For more details on the fund release strategy for the fiscal year 2024-25, visit the Ministry of Finance’s official website.

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