Lahore, December 20, 2022 (PPI-OT):The approval of the Punjab Public Finance Management Act, 2022 by the Provincial assembly is welcome. Reforms in the public finance management system and the promulgation of the Public Finance Management Act, 2022 is a major step towards the economic reforms agenda of the Punjab government.
The implementation of the Act will make the budgeting process transparent and efficient. Budgeting guidelines laid down under the Public Finance Management Act, 2022 will minimize the potential for the wastage of public money. Before the preparation of the budget, mid-term planning, covering three to five years, will be an integral part of the budgeting process.
Under the Act, the provincial government will be obliged to inform the institutions of their mid-term framework and the public sector departments will ensure the preparation of the budget accordingly.
These views were expressed by Punjab Finance Minister Sardar Mohsin Khan Leghari today on the occasion of the issuance of a formal notification for the implementation of the Public Finance Management Act, 2022 by the Punjab assembly. The minister said that under Article 119 of the constitution, the preparation of the PFM Act was an important responsibility of the province, which the finance department had performed well.
The Public Finance Management Act, 2022 will be helpful for all departments including the finance department and the Planning and Development Department in the implementation of public financing-related issues, he maintained. The minister appreciated the services of the Sub-National Governance Program and the Foreign Commonwealth and Development Office in preparing the Act.
Explaining the various provisions of the Act, he said that under the Public Finance Management Act, 2022, the allocation of funds during the budgeting process will be done based on outputs. Along with the allocation of funds in the budget, their goals and the period of their achievement will also be determined.
The finance department will issue key indicators for the efficient use of funds and improvement in performance to all government departments, which will be approved by the government, he noted.
The Act also includes a chapter on fiscal risk aimed at controlling the budget deficit. In addition, the minister added that the Act also prescribes a debt ceiling that will ensure the soundness of the debt management system. 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 are running on government grants and subsidies will be made self-sustaining, he explained. The revenue collected from the continuously loss-making institutions will belong to the treasury funds of the government, he further said.
Finance Secretary Wasif Khurshid said that the province needed a comprehensive Public Finance Management Act that would provide guidance in better performance of fiscal responsibilities, increase in tax collections, and rationalization of expenditure and debt management. All these matters are covered in the Public Finance Management Act, 2022, he added.
For more information, contact:
Directorate General Public Relations,
Government of the Punjab
Lahore, Pakistan
Tel: +92-42-9201390-86
Website: www.punjab.gov.pk