LAHORE: To improve the distribution of provincial resources and bring transparency to the budgeting process, the Punjab government will table Punjab Public Finance Management Bill 2022 in the Punjab Assembly after its approval from the Punjab Cabinet.

Major reforms were being introduced in the Public Finance Management System, said the Punjab finance department on Tuesday. In this connection, Punjab Finance Minister Sardar Mohsin Khan Laghari presided over a meeting to review the Public Finance Management Reforms Strategy in Punjab.

The purpose of the new legislation was to give legal cover to the guidelines laid down for budgeting. The Punjab finance department has prepared a draft of the Public Finance Management Bill 2022, which will be submitted to the Cabinet Committee after clearing the concerns of the Punjab law department.

Under the new law, the allocation of funds will be made based on outputs during the budget-making process.

“Along with the allocation of funds in the budget, their goals and its timeline will also be determined, which will ensure improvement in the performance of the departments. Moreover, the bill also will include a chapter on fiscal risk, aimed at controlling the budget deficit; in addition, the new law will set the limit for taking loans, which will complement Punjab’s debt management system.

Once the new law was passed, lapsed funds will be made a part of the provincial fund and it can be utilised for the purposes for which they were earmarked when required. Moreover, institutions running on government grants and subsidies will be made self-sufficient.

The new law proposes to set up two accounts in the State Bank of Pakistan: one for public funds and the other for treasury funds. The revenue collected from the loss-making institutions will deposit their recoveries in the treasury account, which will improve the government’s cash flow as well as make utilisation of the budget more efficient.

The new bill also proposes reporting of assets of autonomous bodies so that the government knows where the money was coming from these bodies. In addition to this, the frozen assets in the accounts of the institutions will be mobilised to increase government resources.

Sub-National Governance Programme Supervisor Abdul Rahman Warraich told the meeting that under the Public Finance Management Bill 2022, government institutions will be controlled while maintaining their autonomy.

“The budget issued to the departments under the new law will be regularly reported, hence ensuring budget transparency and comparison with other countries,” he added.

Copyright Business Recorder, 2022