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“Public financial management reforms on the horizon”

“Public financial management reforms on the horizon”

According to Punjab Finance Minister Mohsin Khan Leghari, the administration is implementing changes to the public finance management system to ensure effective resource allocation and transparency in the province’s budgeting process.

The law’s goal is to make the established budgeting rules lawful. The finance department has created a draught of the Public Finance Management Act 2022, which will be presented to the cabinet committee once the law department’s objections have been addressed.

He said the Punjab Public Finance Management Act 2022 is being introduced for implementation of reforms in the finance management system, which would ultimately be approved by the Punjab Assembly after approval from the Cabinet. He was presiding over the review meeting of the Public Finance Management Reforms Strategy.

According to the minister, the Act’s budgeting procedure would involve allocating funds based on outputs. The budget’s allotment of funding will be accompanied by targets and a timeline for achieving them, which will guarantee improvement in department performance, the speaker continued.

According to the minister, funds that expire each year under the Act will become a part of the provincial fund and will be used for the specified reasons.

The Act also created a debt ceiling that would guarantee the soundness of the debt management system and included a chapter on fiscal risk intended to control the budget deficit, he continued.

He stated that under the Act, two accounts will be formed in the State Bank, one for the public fund and the other for the Treasury, and that this will enable institutions that currently depend on government grants and subsidies to become self-sufficient.

The money raised from the institutions that consistently post losses would go into the government’s coffers. He stated that a single treasury account will increase the government’s cash flow and increase the effectiveness of the budget.

According to Mr. Leghari, the Act also recommended disclosing the assets of independent organisations so that the government would know where the money was coming from. Additionally, he added, the institutions’ frozen assets in their accounts would be released to augment government funding.

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