- Amendments aim to strengthen accountability, improve budget oversight, and align with international fiscal best practices
The federal government has issued the updated Public Finance Management Act, 2019, incorporating amendments up to June 30, 2024, with a focus on improving fiscal discipline, accountability, and transparency in the management of public funds, according to a news report.Â
The amendments broaden the scope of fiscal responsibility, ensuring that all government entities, including autonomous organizations and state-owned enterprises, are held accountable. They also clarify the roles and responsibilities of the Ministry of Finance, government divisions, and public entities.
First enacted in 2019, the law was part of broader fiscal reforms introduced to address budgetary management gaps, enhance debt sustainability, and improve public spending oversight, in line with the requirements set by international lenders.
Under the amended law, the federal government is required to present an Annual Budget Statement before the National Assembly each year, detailing the purpose, estimates, and breakdown of funds for each demand for grant. The budget statement must also include statements on contingent liabilities and fiscal risks.
One of the key updates is the requirement for disclosing sovereign guarantees and contingent liabilities, a move aimed at restoring confidence among international lenders.
The Act mandates that all government spending, whether for recurrent or development grants, be based on strategic priorities approved in the budget strategy paper. Additionally, the Finance Division is empowered to oversee budgetary processes, cash management, guarantees, and borrowing with stricter reporting and disclosure guidelines. It also sets medium-term fiscal objectives to improve debt sustainability and fiscal transparency.
The law also introduces provisions for the management and oversight of special funds, including requirements for financial statements and limits on unauthorised borrowing by public entities. The Auditor General of Pakistan has been granted increased powers to audit these entities, and the Public Accounts Committee (PAC) has been given enhanced authority for parliamentary scrutiny.
These updates aim to align Pakistan’s fiscal management with international best practices, improve investor confidence, and curb inefficiencies in public spending. The amendments also promote stronger coordination between the federal and provincial governments to ensure fiscal responsibility.
The revised law comes as Pakistan faces pressure from international lenders to enhance transparency and manage debt more prudently.
