Islamabad, Nov 15: IMF Calls for Expanded Workforce in Finance Division to Strengthen Budget Preparation. In order to support budget preparation, the International Monetary Fund (IMF) has advised Pakistan to increase forecast cycles and align them with the budget, as well as to improve the Finance Division’s ability to lead and coordinate macro-fiscal projections.
The Fund’s technical assistance report also suggested actions to reduce dual (“recurrent/capital”) budgeting, including more guidance and binding ceilings in the Budget Call Circular, and implementing a strategic phase to the budget process in accordance with the Public Financial Management Act (PFMA) 2019 and the accompanying Budget Manual.
In order to align the structure with best practices from throughout the world, the Fund requested that Pakistan think about restructuring the Finance Division with an emphasis on its budget and budget management duties.
In order to ensure that Supplementary Budget Statements are subject to the same scrutiny and process as the Annual Budget Statement, including ex-ante approval by the National Assembly of supplementary grants, the international lender urged the implementation of the Supreme Court’s ruling on supplementary grants No. 20 of 2013.
To guarantee more clarity and certainty about the interpretation and application of this decision, pertinent legislation and regulations, including possibly Article 84 of the Constitution, can be changed. To preserve budget flexibility, suggest adding a contingency reserve to the budget.
At the same time, a specific audit of the workings and efficacy of previous years’ supplemental funds could be carried out by the Auditor General of Pakistan (AGP). The Fund also requested that a PFM Digitalization Master Plan be created, a high-level Steering Committee be established to supervise the Plan’s coordination and execution, Fiscal Data Governance (FDG) practices be strengthened, the next steps after SAP life support ends in 2025 be considered, and the business processes for budget preparation and execution in FABS be reviewed.
