ISLAMABAD: The government on Thursday decided to release half of the funds earmarked under the Public Sector Development Programme (PSDP) in the first half of a given fiscal year, in a bid to speed up uplift process.
As per the current scheme, 40 percent funds were being provided to PSDP projects in the first six months with 20 percent in each of the first two quarters.
The finance division said it took the decision in line with the Prime Minister Imran Khan’s directive to speed up the process of development projects and schemes. The division shortened the budget release process for development funds following the World Bank’s call for proper utilisation of development budget.
“The step is aimed at easing funds flow and removing bottlenecks, to boost economic development,” said the Ministry of Finance in a statement. It claimed the steps include increased availability of funds, friendly processes and incentives for early and proper utilisation of funds.
“Half of the budgetary allocations for approved PSDP projects have been made instantly available to ministry of planning and development by revising finance division’s release strategy,” the ministry said.
The ministry also said the existing “practice of endorsement by officers of Finance Division on the PSDP funds releases sanctioned by the Principal Accounting Officers (secretaries of the various divisions) is also being withdrawn forthwith.”
The finance ministry said the whole process of authorisation, releases and sanctioning of PSDP allocated funds should be dealt between ministry of planning, development and reforms and ministries / divisions and concerned PAOs.
An updated release plan for approved PSDP projects to formalise the new strategy is part of the Public Finance Management Act 2019 passed as part of the Finance Bill 2019-20 under the requirements of the World Bank and IMF.