Leghari Welcomes Approval Of Punjab Public Finance Management Act 2022

Leghari welcomes approval of Punjab Public Finance Management Act 2022

Punjab Finance Minister Sardar Mohsin Khan Leghari said on Monday that approval of Punjab Public Finance Management (PFM) Act 2022 by Provincial Assembly was a welcome step.

LAHORE, (UrduPoint / Pakistan Point News - 12th Dec, 2022 ) :Punjab Finance Minister Sardar Mohsin Khan Leghari said on Monday that approval of Punjab Public Finance Management (PFM) Act 2022 by Provincial Assembly was a welcome step.

Sharing his views with media persons here on the occasion of issuance of a formal notification for the implementation of the Public Finance Management Act, 2022 by Punjab Assembly, he added that reforms in the public finance management system and the promulgation of the Public Finance Management Act 2022 was a major step towards the economic reforms agenda of Punjab government.

The implementation of the Act, he observed, would make the budgeting process transparent and efficient. Budgeting guidelines laid down under the Public Finance Management Act 2022 would also minimize the potential for the wastage of public money, he asserted.

Leghari said that before preparation of the budget, mid-term planning, covering three to five years, would be an integral part of the budgeting process. Under the Act, he said, the provincial government would be obliged to inform the institutions of their mid-term framework and the public sector departments would ensure the preparation of the budget accordingly.

The minister said that under Article 119 of the Constitution, the preparation of the PFM Act was an important responsibility of the province, which the Finance Department had performed well. The Public Finance Management Act 2022 would be helpful for all departments including the Finance Department and the Planning and Development Department in the implementation of public financing-related issues, he maintained.

The minister appreciated the services of the Sub-National Governance Programme and the Foreign Commonwealth and Development Office in preparing the Act.

Explaining the various provisions of the Act, he said that under this Act, the allocation of funds during the budgeting process would be done based on outputs. Along with the allocation of funds in the budget, their goals and the period of their achievement would also be determined. The Finance Department would issue key indicators for the efficient use of funds and improvement in performance to all government departments, which would be approved by the government, he noted. The Act also included a chapter on fiscal risk aimed at controlling the budget deficit.

The minister added that the Act also prescribed a debt ceiling that would ensure the soundness of the debt management system. Funds lapsed every year under the Act shall be made part of the provincial fund and these funds shall be utilized for the purposes for which they were earmarked when necessary. Institutions which were running on government grants and subsidies would be made self-sustaining, he explained. The revenue collected from the continuously loss-making institutions would belong to the treasury funds of the government, he said.

Punjab Finance Secretary Wasif Khurshid said that the province needed a comprehensive Public Finance Management Act that would provide guidance in better performance of fiscal responsibilities, increase in tax collections, rationalization of expenditure and debt management. All these matters were covered in the Public Finance Management Act 2022, he added.