Govt Orders Return of Unused Funds Ahead of Budget

The Ministry of Finance has instructed all ministries, divisions, departments, and autonomous bodies to return unutilised funds within a 10-day timeframe to facilitate the finalisation of revised estimates for FY2025-26 and support preparation of the upcoming federal budget, according to a report by Dawn.

In an official communication, the Finance Division directed principal accounting officers to identify and report anticipated savings across all major expenditure heads by May 10, with submissions to be forwarded to the Budget Section for recording in the system.

The Public Accounts Committee has also directed the Finance Ministry to ensure timely surrender of funds and to hold departments accountable for requests involving additional budgetary allocations.

The directive applies to four key expenditure categories, including civil government operations covering employee-related and non-employee expenses, grants, subsidies, and development spending under the Public Sector Development Programme (PSDP).

Officials stated that the deadline has been brought forward from May 31, as originally provided under Section 12 of the Public Finance Management Act, 2019, following instructions from the Public Accounts Committee aimed at strengthening fiscal discipline and enabling efficient reallocation of resources.

The development comes amid a reduction of Rs173 billion in PSDP allocations for the current fiscal year, undertaken to finance fuel subsidies in response to rising petroleum prices linked to geopolitical tensions involving the United States, Israel, and Iran.

Data indicates that federal entities have utilised less than half of their development budgets during the first nine months of the fiscal year. PSDP expenditure reached Rs415 billion between July and March, representing 41.5% of the total Rs1 trillion allocation, compared to 36.4% utilisation during the same period last year.

As of March 31, authorisations by ministries and divisions stood at Rs589 billion, while actual expenditure was recorded at Rs414.96 billion.

In contrast, utilisation under parliamentarians’ schemes remained relatively higher, with approximately 70% of allocated funds spent within nine months. Under the Sustainable Development Goals Achievement Programme, Rs57.23 billion was authorised out of a revised allocation of Rs63.24 billion, with over Rs44 billion disbursed.

Under the current fiscal framework, the Finance Ministry’s release schedule allocates 15% of funds in the first quarter, 20% in the second, 25% in the third, and the remaining 40% in the final quarter.