Monday February 06, 2023

Finance ministry prepares grant in aid rules for 60 bodies

February 27, 2022

ISLAMABAD: Ministry of Finance on Saturday prepared grant in aid rules for binding over 60 autonomous bodies working under different ministries/divisions to avoid wasteful expenditures as the government allocated Rs621 billion for such institutions.

An allocation of Rs1.061 trillion was made for grants in aid and other transfers and after deducting contingent liabilities of Rs440 billion, the amount stood at Rs621 billion for this purpose during the current fiscal year 2021-22.

Grant in aid is an avenue available to ministries/divisions for incurring wasteful expenditures, as such autonomous bodies are not self sustainable thus inflicting losses to the national exchequer. Its another form of circular debt incurring on annual basis.

There was a need to analyse whether these institutions were necessary, or their existence came only at the cost of the national exchequer.

In order to implement Public Finance Management (PFM), the Ministry of Finance prepared the grant in aid rules, one of which focuses on maximising internal resource generation of organisations to minimise dependence on government budgetary support.

The government allocated Rs242 billion for Benazir Income Support Programme; Rs62.5 grants to the Higher Education Commission; Rs42 billion grant in aid for Railways and the same for enhancement to security; Artist Welfare Fund Rs20 billion; PM Kamyab Jawan Programme Rs10 billion; Postal Life Insurance Company Limited and other liabilities Rs8 billion; provision of relief Rs7 billion; Economic Affairs Division Rs6 billion; Pakistan Bait-Ul Mal Rs4.2 billion; scheme for marketing home remittances Rs3 billion; Pakistan Poverty Alleviation Fund Rs2 billion; and Pakistan Machine Tool Factory Rs500 million.

All public entities should maintain database related to grants, income, expenditures, investment, assets and employees’ strength.

In order to obviate duplication in grant in aid, the ministry or division should maintain a list of institutions or organisations along with details of amount and purpose of grants given to them. The details should be made available on the website of concerned ministry/division.

The award of grant in aid should be considered on the basis of viable and specific schemes drawn up in sufficient details by the institution or organisation.

In making grant in aid to public sector entities, local bodies or non-government institutions, a condition should be laid down that assets acquired wholly or substantially out of government grants, except those declared as obsolete and unserviceable or condemned in accordance with procedures laid down in General Financial Rules should not be disposed of without obtaining the prior approval of the authority which sanctioned grant in aid.

When an allotment for discretionary grants gets placed at the disposal of a particular authority, the expenditure from such grants should be regulated by general or special orders of the competent authority specifying the object for which the grants could be made and any other conditions that apply to them. Such discretionary grants should be non-recurring and not involve any future commitment, the ministry said.