FD moves to strengthen public finance management, budgeting

ISLAMABAD: The Finance Division has initiated measures to strengthen public finance management, fiscal forecasting, budget execution and performance-based budgeting by bringing in specialised expertise to implement reforms n federal budgetary practices. Official sources said that the initiative envisages strengthening the government’s capacity to forecast revenues and expenditures, analyse fiscal data, improve budget allocation and expenditure controls, and enhance reporting in line with national and international public finance standards. Under the proposed arrangement, specialised support will be provided for annual, half-yearly and quarterly revenue and expenditure forecasts, as well as compilation, analysis and reporting of fiscal data required by international credit rating agencies. The Finance Division is also seeking to strengthen analysis of budgets and expenditures of federal ministries, divisions, attached departments and autonomous bodies, with particular focus on indicative budget ceilings for civil government, defence, pensions, grants, subsidies, net lending and the Public Sector Development Programme (PSDP). The reforms are aimed at modernising budgetary practices to improve efficiency and ensure better utilisation of public resources. The Finance Division has also identified improvements in the budget preparation process and stronger budget execution and expenditure controls as key areas, with monthly and quarterly reviews envisaged to monitor implementation. Another component of the reforms is revision of the Budget Manual in line with the requirements of the Public Finance Management Act and support to Chief Finance and Accounts Officers (CFAOs) in implementing the revised provisions. The Finance Division is also focusing on greater budget transparency through fiscal risk disclosures, the Budget Strategy Paper, Mid-Year Review Report, Fiscal Policy Statement, medium-term performance-based budgeting and year-end performance monitoring reports. The proposed reforms seek to further institutionalise Output-Based Budgeting and Performance Budgeting across federal ministries and divisions. Under the arrangement, Principal Accounting Officers (PAOs) and CFAOs would be supported in implementing mid-year budget reporting and performance reporting against approved outputs and targets, including comparison of budgeted and actual expenditure. The Finance Division also plans to develop mechanisms for more efficient utilisation of grants as part of the budget process and strengthen the capacity of budget officials through training and technical assistance. The move comes amid growing emphasis on strengthening fiscal management, improving expenditure efficiency and enhancing transparency in the federal budget process. For this purpose, the Finance Division has outlined a specialised Public Finance Management Specialist position requiring at least 10 years of relevant experience in public finance management, fiscal management, revenue management, budget allocation, and public financial planning and budgeting. Copyright Business Recorder, 2026

Read full story on Business Recorder