LAHORE: The Punjab government is introducing reforms in the public finance management system for efficient allocation of resources and transparency in the budgeting process in the province.
The Punjab Public Finance Management Act-2022 is being introduced for implementation of reforms in the finance management system, which would be finally approved by the Punjab Assembly after cabinet’s approval. The purpose of the Act is to legalize the guidelines laid down for budgeting. A draft of the Public Finance Management Act-2022 has been prepared by the Punjab Finance Department, which would be submitted to the cabinet committee after clearing the concerns of the Provincial Law Department.
Finance Minister Sardar Mohsin Khan Leghari disclosed this while chairing the review meeting of Public Finance Management Reforms Strategy in Punjab organized by the Finance Department here on Tuesday.
The minister said that during the budgeting process under the Public Finance Management Act, the allocation of funds would be done based on outputs. Along with the allocation of funds in the budget, their goals and the period of their achievement would also be determined which would ensure improvement in the performance of the departments, he mentioned.
The Act also included a chapter on fiscal risk aimed at controlling the budget deficit and it set a debt ceiling that would ensure the soundness of the debt management system, he added.
Funds lapsed every year, under the Act, shall be made part of the provincial fund and these funds shall be utilized for the purposes for which they were earmarked when necessary. Institutions which were running on government grants and subsidies would be made self-sustaining, he noted.
Under the Act, two accounts would be opened in the State Bank, one for the public fund and the other for the treasury. The revenue collected from the persistently loss-making institutions would be part of the treasury funds of the government. A single treasury account would improve the cash flow of the government and make the budget more efficient, he maintained.
The Finance Minister said that the Act had also suggested reporting the assets of autonomous institutions so that the government knew where the money was coming from these institutions. In addition to this, the frozen assets in the accounts of the institutions would be mobilized to increase government resources, he said. Among the others, Debt Management Unit and Sub-National Governance Program Supervisor Abdul Rehman Waraich and relevant officers of the Finance Department were also present. Abdul Rehman Waraich told the meeting that under the Public Finance Management Act-2022, the institutions would be controlled while maintaining their autonomy. The budget issued to the departments, under the Act, would be regularly reported which will enable budget transparency and comparison with other countries.
