Finance Division outlines strategy for uplift fund releases in FY2025-26

The Finance Division has released its strategy for the disbursement of funds for both development and recurrent budgets for the fiscal year 2025-26, with all releases contingent upon the availability of fiscal space. 

An office memorandum (OM) issued by the division details the distribution of funds across different budget categories and specifies quarterly release limits.

For the development budget, funds will be authorised by the Planning, Development and Special Initiatives (PD&SI) Division from the Public Sector Development Programme (PSDP) allocation. The release for approved projects will follow a set schedule: 15% in Quarter 1, 20% in Quarter 2, 25% in Quarter 3, and 40% in Quarter 4. 

Employee-related expenditures (ERE) and pension payments will be released at 25% for each quarter. Non-employee related expenditures (Non-ERE) will be released at 15% for Quarter 1, 25% for Quarters 2 and 3, and 35% for Quarter 4.

For recurrent budget funds, the Finance Division will release funds at 20% for Quarter 1, 25% for Quarters 2 and 3, and 30% for Quarter 4. All releases will be subject to fiscal space availability. 

Furthermore, while executing development projects, PD&SI and the concerned accounting offices (PAOs) must adhere to the provisions of the Public Finance Management Act, 2019.

The Finance Division has also established guidelines for the re-appropriation of funds, supplementary grants, and adjustments related to employee and non-employee expenditures. All payments for foreign exchange must receive prior approval from the External Finance Wing of the Finance Division. Payments for any contractual obligations beyond the approved limits will be reviewed on a case-by-case basis.

Additionally, the Finance Division has set aside funds for the Ad-hoc Relief Allowance 2025, which will be released entirely in Quarter 3. The release of funds for autonomous bodies and authorities will be conditional upon budget approval by their respective competent authorities.

The Finance Division has also emphasized that grants, subsidies, and loans will be processed in coordination with the relevant wings, and all disbursements will be subject to compliance with the budget plan and approval from the Finance Secretary.

PAOs have been advised to follow the guidelines strictly to ensure smooth and efficient fund allocation and management throughout the fiscal year.