The government has authorised the Planning and Development Division to release funds for development projects under Public Sector Development Programme (PSDP) 2010-11 to avoid delay in fund releases. The government has notified procedures regarding the new mechanism for release of funds for development projects under PSDP 2010-11.
Release for People's Works Programme (PWP)-I and 2 will not be covered under the new mechanism. However, the amount released under these programmes will not affect the overall amount to be released during the month/quarter for other development projects. Under the new mechanism, maximum quarterly ceilings for release of funds would be 20 percent each for first and second quarters, 25 percent for third quarter and 35 percent for fourth quarter. These releases would be a maximum of 7 percent per month during the first and second quarters, maximum 8 percent per month during the third quarter and maximum 12 percent per month during the last quarter.
For release of funds to provincial projects, either being fully financed by the federal government or on cost sharing basis, on the recommendations of Planning and Development Division, the existing procedure will be adopted ie sanction issued by Provincial Finance wing of Finance Division. In case the provincial governments do not contribute their agreed share, as per existing rules / practice, the next release of funds will be withheld. Planning and Development Division will only approve releases against rupee allocation ie net of foreign aid and Ministries/Divisions will have to recommend more releases against fast moving projects while remaining within overall monthly ceilings as indicated in the new mechanism.
By 15th of each month of FY 2010-11, the Ministries/Divisions would be required to furnish consolidated project-wise requirement of funds (included in the PSDP 2010-11) for the subsequent month. In case demand is not received by the target date or incomplete information is furnished, sponsoring agency will be responsible for delay in releases. To ensure fast rack releases, ad hoc requests will not be entertained and such request would be considered along with request for release of funds in the subsequent month.
Based on the amount approved by Planning and Development Division, Ministry/Division concerned will issue sanction letter, indicating amount required under detailed object head while remaining within authorised amount, for release of funds addressed to AGPR with a copy to Advisor (Dev Budget), Planning and Development Division and budget and expenditure wings of Finance Division.
Fund releases in the subsequent quarter shall be made subject to utilisation of funds released in the previous quarter(s) during the year after furnishing a certificate by the Principal Accounting Officer regarding satisfactory implementation of the project.
Provincial governments may move cases by 12th of each month of FY 2010-11 to Finance Division for release of funds during the subsequent month within the prescribed ceiling. Chairman Planning and Development Board/ACS (Dev) would certify that funds were credited to the project account by Provincial Finance Department before making the next request for release of fund. Funds to special areas will be released as per existing system.
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