2. OVERVIEW
BUDGET CYCLE IN PAKISTAN
• Introduction
• Budget basics
• Budget process in Pakistan
• Budget cycle
• Preparation of budget
• MTBF components
• MTBF process
• Conclusion
3. INTRODUCTION
• The budget of the state is one of the most
important policy documents. Here the ideas are
translated into implementable policies
prioritized by the allocations of funds. In
Pakistan, the government and the parliament
eagerly anticipate the moment in the month of
June when the state budget is tabled in
Parliament.
4. BUDGET BASIS
• A budget is the government's financial plan
describing the proposed expenditures and the
means of financing them.
• An excess of government's proposed
expenditures over its estimated revenues is
called a 'budget deficit‘.
• An excess of revenues over the expenditure is
generally termed 'budget surplus‘.
5. STEPS IN BUDGET CYCLE
• SETTING OF BUDGET POLICY AND PRIORITIES
The first stage of budget cycle usually covers setting of
budget priorities, policies and initiatives by the
national/provincial cabinet
• BUDGET PREPARATION
The preparation and submission of budget estimates of
expenditure and receipts
6. Cont.…
• AUTHORIZATION
• Submission of the annual budget statement before
the national/provincial assembly.
• Approval by the national/provincial assembly after it
is debated/discussed in the assemblies
• Authentication by the prime minister/chief minister.
7. Cont.….
• EXECUTION
• Communication of the budgets to the spending
ministries, administrative departments and respective
accountant general office/accountant general of Pakistan
revenue by ministry of finance/finance department
• PERIODIC REVIEW
• This covers periodical review of financial performance
and the achievement of policy objectives by spending
departments
8. MTBF PROCESS
• The MTBF involves preparation by line ministries
of three-year expenditure estimates within the
ceilings provided by the Ministry of Finance (for
the recurrent budget) and by the Planning
Commission (for the development budget).
9. Top-Down
• It is built on the Medium Term Fiscal Framework
(MTFF), which is developed for reporting to the
Assembly under the Fiscal Responsibility and Debt
Limitation Act (2005). The MTFF establishes
available resources.
• A Budget Strategy Paper (BSP) which is prepared
annually (in October and February each year) and
provides an analysis of pressures on the budget and
the options for sectoral expenditure in the light of
government priorities. The BSP is prepared by
Division and the Planning Commission jointly.
10. Cont.….
• The setting of indicative budget ceilings for
the recurrent and development budgets for
each line ministry (initially the MTBF
ministries) at the start of the budget
preparation process – based on the analysis
of the BSP
11. Bottom Up
• Replace the traditional process for budget preparation,
which is driven upwards by the spending units, with a top-down
process within each line ministry whereby the
senior management of the ministry direct the budget
preparation process
• Strengthen the definition of the services (outputs) to be
delivered by each ministry
• Identify the costs of delivering each service, initially by
mapping the current allocation of expenditure onto
outputs, thereby providing a ‘baseline’ cost-per-output
12. CONCLUSION
• An annual budget(s) should be adopted by every
governmental unit
• The accounting system should provide the basis
for appropriate budgetary control.
• A budget, when adopted according to
procedures specified in state laws, is binding
upon the administrators of a government.
