Govt sets quarterly release plan for FY27 recurrent budget

The Finance Division has issued the release strategy for the recurrent budget for FY2026-27, setting quarterly limits for funds under all Demands for Grants and Appropriations.

According to an office memorandum, the strategy has been issued under the Public Finance Management Act, 2019 and the Financial Management and Powers of Principal Accounting Officers Regulations, 2021.

The Finance Division said recurrent budget funds will be released at 20% in the first quarter, 25% in the second quarter, 25% in the third quarter and 30% in the fourth quarter.

Employee-related expenditures and pension payments will be released at 25% in each quarter.

Non-employee related expenditures will be released at 15% in the first quarter, 25% each in the second and third quarters, and 35% in the fourth quarter.

Funds for rent of office and residential buildings, commuted value of pension, encashment of leave preparatory to retirement and Prime Minister’s Assistance Packages will be released 45% in the first half of the current financial year and 55% in the second half.

The Finance Division said subsidies, grants and lending will be released on a case-by-case basis.

Cases involving international and domestic contractual obligations, along with obligatory payments beyond the prescribed quarterly limits, will also be considered separately by the Finance Division.

Principal Accounting Officers, heads of attached departments and heads of subordinate offices have been barred from re-appropriating funds from employee-related expenditures to non-employee related expenditures without prior concurrence of the Finance Division.

The memorandum said additional funds have been provided to Principal Accounting Officers for the Ad-hoc Relief Allowance 2026 announced in the budget under a separate cost centre.

The Finance Division will release 100% of these funds in the third quarter. Principal Accounting Officers have been advised to re-appropriate these funds only for Ad-hoc Relief Allowance in the third quarter, if required, in consultation with the Expenditure Wing.

For autonomous bodies, authorities, commissions, funds, boards and similar entities, funds will be released under the quarterly mechanism after approval of their annual budgets by the competent authority under relevant statutes, rules or regulations.

Principal Accounting Officers must send a certificate of such approval to the Expenditure Wing. These entities will also have to provide budget details under object-wise classification, along with receipts.

The Finance Division said the Grants-in-Aid Rules, 2025 must be followed, while allocation and disbursement of funds to public and private entities will be linked to outputs, outcomes and performance.

It also said grants-in-aid will be treated as non-recurring and disbursed only to meet justified shortfalls for a limited period.

For grants and subsidies, Principal Accounting Officers will prepare quarterly funds requirements or cash plans and share them with the relevant wings of the Finance Division before the start of each quarter.

The relevant wings will review these cash plans in consultation with the Budget Wing and seek approval from the Finance Secretary.

The memorandum said any deviation from approved cash plans will also require approval of the Finance Secretary.

For lending, release of funds for loans, advances and investments will be subject to repayment of all due amounts to the federal government as per schedule and maturities.

Where repayments have not been made, the relevant wing of the Finance Division will ensure deductions at source.

Funds for lending will be released with the approval of the Finance Secretary.

The Finance Division also directed all Principal Accounting Officers to ensure adequate budgetary allocations for foreign exchange components, or rupee cover, and convey them to the Economic Affairs Division and Finance Division.

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

The memorandum also requires all annual and multi-year commitments for procurement of goods, services and civil works to be recorded in the SAP system by Principal Accounting Officers and accounting offices.

All offices have also been directed to follow austerity measures issued from time to time.

The Finance Division said all payments will be made through the pre-audit system by accounting offices, the Assignment Accounts Procedure or any other procedure issued by the Finance Division.

No direct payment through the State Bank of Pakistan will be allowed without prior approval of the Finance Secretary under the Cash Management and Treasury Single Account Rules, 2024.

Approved direct payments must be booked and recorded by the relevant accounting office immediately after receiving intimation from the SBP.

Special-purpose funds and any other established funds will be regulated under Section 32 of the Public Finance Management Act, 2019, the Cash Management and Treasury Single Account Rules, 2024 and the Special Purpose Funds Rules, 2025.

The Finance Division said quarter-wise fund releases will be uploaded on the Accountant General Pakistan Revenues server within the stated limits.

No accounting office will make payments beyond the release limits without prior approval of the Finance Division.

The memorandum said separate release strategies will be issued for the Public Sector Development Programme, interest payments, loan repayments, supplementary grants, technical supplementary grants and re-appropriations.

It added that all releases will remain subject to the availability of fiscal space.

The office memorandum was signed by Muhammad Atif Qaisrani, Section Officer (FO), Finance Division.