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Budget cycle in pakistan


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Budget cycle in pakistan

  2. 2. OVERVIEW BUDGET CYCLE IN PAKISTAN • Introduction • Budget basics • Budget process in Pakistan • Budget cycle • Preparation of budget • MTBF components • MTBF process • Conclusion
  3. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
  13. 13. THANK YOU