Ministries, Divs barred from releasing funds for new projects

ISLAMABAD: The Ministry of Planning, Development and Special Initiatives has barred ministries/Divisions from releasing funds for new development projects without its prior approval.

In a letter to all the ministries/Divisions, Assistant Chief (Releases) Ministry of Planning, Development and Special Initiatives, referred to the first quarter authorization of 2024-25, saying that the Public Sector Development Programme (PSDP) FY 2024-25 was approved by the National Economic Council (NEC) and the Parliament with a size of Rs. 1,400 billion.

The Finance Division revised the PSDP keeping in view fiscal constraints/primary balance target, at reduced size of Rs 1,100 billion on July 26, 2024. Accordingly, project-wise budgetary allocations have been adjusted while assigning priority to Core, Foreign Funded and Near Completion projects as per the NEC approved criteria.

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The Finance Division, in an Office Memorandum (OM) of July 12, 2024 conveyed strategy for release of funds for development budget @ 15% for Q-1, 20% for Q-2, 25% for Q-3 and 40% for Q-4, and inter-alia has authorized this Ministry to devise quarterly sector-wise/project-wise/Division-wise strategy for release of PSDP funds.

Accordingly, Ministry of Planning, Development and Special Initiatives has authorized one-liner release of PSDP funds to the extent of 15% of rupee allocation during 1st Quarter of CFY. The Ministry wise list indicating quarterly ceiling for Q-1 has also been shared.

Ministry of Planning, Development and Special Initiatives has asked the Secretaries/PAOS of concerned ministries/Divisions to ensure utilization of funds as per requirement of budgeted projects while releasing more funds to ongoing fast-moving and foreign-funded projects on priority within the given quarterly ceiling.

The ministry has also asked that for new projects the sponsoring executing agencies must seek clearance from MPD&SI/PC before initiating any expenditure.

The letter further says that all codal formalities, pre-requisites and instructions issued from time to time by Planning Ministry and Finance Division such as GFR, Public Finance Management Act, 2019, Financial Management and Powers of PAOs Regulations 2021, Asian Assignment Account Procedure 2023, Revolving Fund Procedure 2022 and Strategy for release of funds for Development Budget 2024-25 may be adhered strictly to release and utilization of development funds.

The ministries/Divisions concerned have been asked to expedite sanction/release of funds, as per procedure within specified 1st Quarter ceiling and ensure optimum utilization and a copy of release sanction as and when issued be endorsed to Planning Ministry, for record.

Copyright Business Recorder, 2024