Finance Division Outlines FY25-26 Budget Fund Strategy

Islamabad, July 11, 2025, 05:59 PM PKT — The Finance Division has unveiled a stringent strategy for disbursing development and recurrent budget funds for FY 2025-26, with all releases tied to fiscal space availability, per an office memorandum (OM) detailing quarterly limits across budget categories. The Planning, Development and Special Initiatives (PD&SI) Division will authorize Public Sector Development Programme (PSDP) funds for approved projects at 15% in Quarter 1, 20% in Quarter 2, 25% in Quarter 3, and 40% in Quarter 4. Employee-related expenditures (ERE) and pensions will see 25% per quarter, while non-employee related expenditures (Non-ERE) will get 15% in Quarter 1, 25% in Quarters 2 and 3, and 35% in Quarter 4. Recurrent budget funds will be released at 20% in Quarter 1, 25% in Quarters 2 and 3, and 30% in Quarter 4, all subject to fiscal constraints.

PD&SI and accounting offices (PAOs) must comply with the Public Finance Management Act, 2019 for development projects, with fund re-appropriation, supplementary grants, and expenditure adjustments governed by strict guidelines. Foreign exchange payments require prior External Finance Wing approval, and contractual obligations beyond limits will be case-by-case reviewed. The Ad-hoc Relief Allowance 2025 funds are reserved for Quarter 3, while autonomous bodies’ funds hinge on budget approvals. Grants, subsidies, and loans will align with budget plans and Finance Secretary approval, with PAOs urged to enforce guidelines for efficient fund management.

Web context highlights budget allocation debates (e.g., 10% shortfall risks), while posts found on X show concern—some note fiscal caution, others question implementation. Critically, the narrative of “strategic disbursement” may mask funding uncertainties—web data points to past delays, and X sentiment suggests distrust in fiscal space assurances, hinting at potential bottlenecks.