ISLAMABAD (Eshfak Mughal):- The Finance Ministry has formally indicated to the Planning Commission to release 70 percent federal development budget during the second half of the current fiscal year despite the flood related expenditures and ongoing IMF Stabilization program.
The Finance Ministry has developed a strategy for releasing of development and non-development funds to different federal ministries for quarter three and four of the current fiscal year, sources told the scribe.
According to the strategy, the Finance Ministry has informed the Planning Commission that it may releases 30 percent development funds during Jan-March and 40 percent during April-June 2023.
The Finance Ministry said that the spending of 30 percent development funds was approved for first half of the current fiscal year and next 70 percent development funds would be spent during the next half of the current fiscal year.
The Ministry has advised to all Principle Accounting Officers that they may approach to the Planning Commission for any issue related to authorization as well as distribution of funds between the approved projects and scheme.
The strategy of releasing development funds was revised at the time when the government has struggling to carry on relief and rehabilitation activities in flood affected area and resuming the stalled talks with IMF.
Sources said that the Finance Ministry has indicated to the IMF last month to cut 50 percent development budget (Rs727 billion) of the current fiscal year. However, the government has spent only Rs.130 percent development funds during the first five months of the current fiscal year. The data shows that the government has spent only 18 percent during the first five months of the current fiscal year against 30 percent during six months.
The main reason of slow spending on development activities in the country is stabilization of IMF program. The international lender doesn’t allow the government to cross the limit of releasing development funds to control the budget deficit.
It will be difficult for the economic managers of the country to release 70 percent development funds during next six months when the government is facing swear revenue shortage in tax and non-tax income during first half of the current fiscal year.
The Finance Ministry has also indicated to other Federal Divisions to release remaining 60 percent of recurrent expenditures during the second half of the current fiscal year.
The Ministry has issued revised guidelines for Employees Related Expenses (ERE) for second half of the current fiscal year.
According to the revised strategy, no re-appropriation of funds shall be made from ERE to Non-ERE except with the prior approval of Finance Division through Expenditure Wing during the second half of the current fiscal year.
All PAOs are required to meet any shortfall in ERE by re-appropriation of funds from Non-ERE. e. No additional funds shall be provided through supplementary grants and Technical supplementary grants for meeting any shortfall in the ERE as well as Non-ERE during current fiscal year.
The PAOs shall not approach Finance Division for meeting any expenses of Public Entities, Organizations, Authorities and Bodies, which are provided grant in aid, by ensuring proper distribution and adequate allocation of funds to such Public Entities, Organizations, Authorities and Bodies out of the total funds placed at their disposal during CFY.
Non-Employees Related Expenses (Non-ERE) The Non-ERE in respect of Rent of Office and Residential Buildings, Commuted Value of Pension, Encashment of LPR and PM’s Assistance Packages shall continue to be released 50 percent of final budgetary allocations for 2″d Half of CFY.
The funds under head of accounts, “Utilities and P.O.L Charges” shall be released 30 percent of final budgetary allocation for quarter 3 and 30 percent of final budgetary allocation for quarter 4 of the current fiscal year.