Finance Division sets quarterly release limits for FY27 development budget

The Finance Division has issued the funds release strategy for the development budget for FY2026-27, setting quarterly limits for the release of Public Sector Development Programme (PSDP) funds and placing new controls on payments, re-appropriations and foreign exchange-related expenditure.

According to an Office Memorandum issued on July 1, 2026, the strategy has been notified under the Public Finance Management Act, 2019 and the Financial Management & Powers of Principal Accounting Officers Regulations, 2021. It will take effect immediately and remain applicable until further orders.

Under the strategy, funds for the development budget will be authorised by the Planning, Development & Special Initiatives (PD&SI) Division out of the PSDP allocation for FY2026-27 for approved projects.

The release schedule has been fixed at 15% of the allocation in the first quarter, 20% in the second quarter, 25% in the third quarter and 40% in the fourth quarter.

The Finance Division said the Planning, Development & Special Initiatives Division and Principal Accounting Officers (PAOs) must ensure compliance with the Public Finance Management Act, 2019, while executing development projects.

The PD&SI Division has also been directed to prepare a quarterly sector-wise, project-wise and division-wise strategy for the release of PSDP funds within approved appropriations.

Any proposal to change the prescribed quarterly limits will be considered by the Budget Wing of the Finance Division on a case-to-case basis and will require prior approval of the Finance Secretary.

Funds for approved projects listed in the Demand for Grants and Appropriations will be released by PAOs in each quarter as authorised by the PD&SI Division and within the notified quarterly limits.

The Finance Division has directed PAOs to ensure sufficient funds are available for employee-related expenses for each project.

PAOs, heads of attached departments, heads of subordinate offices and project directors have been barred from re-appropriating funds from employee-related expenditure to non-employee-related heads of account without prior concurrence of the PD&SI Division.

The memorandum also requires all PAOs to ensure adequate budgetary allocations for the foreign exchange component, or rupee cover, and communicate these to the PD&SI Division, Economic Affairs Division and Finance Division.

Funds for foreign exchange payments will require prior approval of the External Finance Wing of the Finance Division.

All payments under the development budget will be made through the pre-audit system, the Assignment Account Procedure or any other procedure issued by the Finance Division from time to time. A separate Assignment Account will be opened for each project.

The Finance Division has also barred direct payments through the State Bank of Pakistan, except with prior approval of the Finance Secretary under Rules 3(9) and 3(10) of the Cash Management & Treasury Single Account Rules, 2024.

It said no accounting office will be allowed to make payments over and above the prescribed limits without prior written approval of the Finance Division.

The memorandum further states that instructions regarding supplementary grants, technical supplementary grants and re-appropriation of funds will be issued separately by the Budget Wing of the Finance Division.

However, the release of the development budget will not require ways and means clearance from the Budget Wing.

The Development Wing of the Finance Division will coordinate and oversee matters related to the release of funds for the development budget and other related issues.

PAOs have been advised to approach the PD&SI Division for matters related to authorisations and distribution of funds between approved projects and schemes.

The Finance Division added that all releases under the strategy will remain subject to availability of fiscal space.