Amended up to June 30, 2024: Finance Div releases amended Public Finance Management Act, 2019

ISLAMABAD: Finance Division released the Public Finance Management Act (PFMA), 2019 — amended up to June 30, 2024 — envisaging to strengthen management of public finances with the view to improving definition and implementation of fiscal policy for better macroeconomic management, to clarify institutional responsibilities related to financial management, and to strengthen budgetary management.

The amended Act stated that it is expedient to provide for regulating the custody of the Federal Consolidated Fund, the payment of moneys into that Fund, the withdrawal of moneys there from, the custody of other moneys received by or on behalf of the Federal Government, their payment into, and withdrawal from, the Public Account of the Federation, and all matters connected with or ancillary thereto.

Regarding the budget strategy paper, it stated that the federal government shall approve the budget strategy paper containing quantified macroeconomic and fiscal projections for the medium-term by tenth of May of each year. It shall be published as well as placed on the Finance Division’s official website.

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The paper shall indicate strategic priorities of the government revenue and spending policies and specify indicative levels of spending in various Ministries and Divisions. Upon approval of the paper, the Finance Division shall issue indicative budget ceilings to Ministries and Divisions.

All government expenditures, whether from a recurrent or development demand for grant, shall be based on well-defined plans and the strategic priorities approved in budget strategy paper as per section 3.

The federal government shall, in respect of every financial year cause to be laid before the National Assembly, Finance Bill consistent with Article 73 of the Constitution including a statement of estimated tax expenditure of the federal government.

If in respect of any financial year it is found— (a) that the amount authorized to be expended for a particular service for the current financial year is insufficient, or that a need has arisen for expenditure upon some new service not included in the Annual Budget Statement for that year; or (b) that any money has been spent on any service during a financial year in excess of the amount granted for that service for that year, the federal government shall have power, as prescribed, to authorize expenditure from the Federal Consolidated Fund, whether the expenditure is charged by the Constitution upon that Fund or not, and shall cause to be laid before the National Assembly Supplementary Budget Statement or, as the case may be, an Excess Budget Statement, setting out the amount of that expenditure, and the provisions of Articles 80 to 83 shall apply to those statements as they apply to the Annual Budget Statement.

All Ministries and Divisions, their attached departments and sub-ordinate offices and autonomous organizations shall surrender to the Finance Division by thirty-first day of May each year, all anticipated savings in the grants or assignment accounts or grant-in-aid controlled by them. Provided that in an exceptional case of exigency, the Finance Division may extend the prescribed time limit before the close of the financial year.

Projects defined in public sector development programme shall be classified as: — (a) core projects in national infrastructure requiring complex planning, design and implementation procedures.

The Planning Commission shall designate projects as such in accordance with the criteria notified in official Gazette; and (b) sectoral projects, projects undertaken by specific sectors, Ministries and Divisions which are required to enhance the development of that sector or Ministry or Division and do not fall under the above category of core projects.

All development project proposals shall be subject to a technical approval process. Technical approval shall only be granted to projects which are compliant with the standards and procedures set by the Planning Commission.

The Finance Division, with the approval of the federal government, shall notify policy and rules under this Act to prescribe an effective cash management system for all public entities and special purpose funds leading to treasury single account.

The federal government shall constitute a committee to oversee implementation of this Act and its secondary legislation.

The committee shall also enlist global best practices of the public finance management and shall recommend improvements in this Act and its secondary legislation from time to time. This Act shall have overriding effect over all other laws and any law inconsistent with this Act in contradiction with this Act shall be amended to the extent of the inconsistency.

Copyright Business Recorder, 2026