Finance ministry issues call circular for 2025-26 budget

ISLAMABAD: The Ministry of Finance has issued a Budget Call Circular for the upcoming budget 2025-26 with the possibility to present the next budget in the first week of June 2025.

This budget circular has envisaged that the Annual Plan Coordination Committee is expected to hold its meeting in May 2025 for recommending the macroeconomic and development budget for the next fiscal year to the National Economic Council (NEC).

Under the guidelines, the Budget Circular stated that the provisions of Treasury Single Accounts (TSA) Policy, Public Finance Management (PFM) Act, 2019 and Cash Management & TSA Rules, 2024 are comprehensive and provide specific guidelines with regard to opening and maintaining bank accounts and other deposits/investments by federal government entities.

The federal government has introduced a TSA system in the ministries/divisions/departments and subordinate offices. Work is in progress to extend the scope to other public entities, organizations and bodies.

Details of investments shall include name of accounts(s), date of opening of account(s) and type of account(s). In case of change of name and type of account through the time of operation, the said change shall also be indicated.

All PAOs are required to sanction and spend public money in accordance with the budget approved by the National Assembly. The Finance Division has issued instructions regarding implementation of the budget particularly with regard to quarterly budget release strategy, and any additional requirements in the form of regular or technical supplementary grants.

Revised estimates for FY2024-25 for current and development expenditure must include the following: A- Appropriations or re-appropriations within the sanctioned grants; B- New items of expenditure sanctioned through supplementary grants; and C Surrenders made or likely to be made during the year; D- Revised estimates must be based on well-defined plans and approved strategic priorities; E- Expenditures on subsidies and grants-in-aid must be targeted, and performance/ output based; F- Public funds shall be utilized keeping in view financial propriety including compliance to laws, rules and regulations. The component of Running of Civil Government (RoCG), grant and subsidy should be mentioned in each demand.

The budget for ministry/division and its attached department should be mentioned separately from the budget provided by PAO (as grant in aid) to autonomous organizations within same demand.

Rupee cover and international contributions should be explicitly mentioned within the demand. Budget estimates must be realistic, rationalized and justified.

Austerity measures must be considered while calculating expenditure estimates. Purpose of grants and subsidies must be indicated along with rationale and impact. One-page brief of each subsidy and grant is to be furnished with justification. Variation in estimates must be justified with proper documentary evidence. All autonomous organizations/entities/commissions/authorities etc., receiving funds from budgetary allocation shall obtain approval of the Competent Authority or Forum for their respective budgets as per their legal framework.

Grant-in-aid is to be considered as a one-time dispensation and not a recurring feature. All autonomous organizations/bodies/entities/commissions shall open dedicated assignment accounts as per procedure circulated by Finance Division/ CGA. These organizations/entities shall not be allowed to make expenses through pre-audit system of accounting offices.

All PAOs are being provided budget to meet expenditure of division/department/ subordinate offices under their administrative control. Whereas, autonomous bodies/commissions are to become self-sustaining entities with no further provision of funds from the federal government to meet their recurring/operating expenses/retirement benefits.

All ERE/Non-ERE expenditure of autonomous bodies/corporations are to be borne by the said entities themselves being revenue generating entities.

All defunct/non-performing autonomous bodies/organizations are to be either merged or liquidated to ensure fiscal discipline and to rationalize/economize government expenditure.

All foreign subscriptions/contributions are to be reviewed and rationalized in terms of their efficacy and benefits accrued. All accounting offices shall issue pre-audit cheques or adopt assignment account procedures while making payments; issuance of sealed authorities or direct advice for making payments will be discouraged.

Ministries/divisions/departments are required to submit one Budget Order (BO) and one New Item Statement (NIS), if necessary, for each Cost Centre for Charged and Voted Expenditure separately.

The estimates of development expenditure FY2025-26 should not include any scheme which has not been approved in accordance with the prescribed procedure and PFM Act, 2019.

Foreign exchange component of development expenditure – The foreign exchange component of estimates of development expenditure is required to be shown distinctly together with the source from which it will be met (i.e., whether from own resources or from foreign resources).

Provision made for foreign exchange expenditure would not be available for rupee component expenditure or vice versa and no re-appropriation is permissible between the provision for rupee and foreign exchange expenditure.

In case of development projects or programs, budget for each project/program shall be prepared on separate NIS form. Separate Cost Centre may be obtained for each component of expenditure. All autonomous organizations/ bodies/entities/commissions etc. which are receiving government budgetary funds, shall open dedicated Assignment Accounts as per procedure circulated by Finance Division/CGA. These organizations/entities shall not be allowed to make expenses through pre-audit system of accounting offices.

All vacant/redundant posts (lying vacant/idle for more than three years) are required to be indicated and abolished as per Financial Management & Powers of PAOs Regulations, 2021. No BO/NIS form will be accepted in which ERE has been claimed unless supported with details of posts.

It may be ensured that the total number of posts reflected in Form-X are same as in BO/NIS. Offices/organizations/entities are required to submit copies of the sanction letters along with the approving authority. No new post shall be created in the divisions/departments/sub-ordinate offices/organizations/ entities except with the prior approval of Finance Division.