LAHORE    -   A new law is on the cards for reforms in the financial management system for efficient allocation of resources, Punjab Finance Minister Mohsin Leghari disclosed this while presid­ing over the review meeting of the public finance management reforms strategy in Punjab organized by the finance department.

The minister said that the Pun­jab Public Finance Management Act, 2022 was being introduced for the implementation of reforms in the fi­nance management system. This law will be finally approved by the Pun­jab Assembly after the approval of the cabinet, he said, adding that the purpose of the Act was to legalize the guidelines laid down for budgeting. 

“A draft of the Public Finance Man­agement Act, 2022 has been prepared by the finance department, which will be submitted to the cabinet commit­tee after clearing the concerns of the law department”, he told the meeting. Leghari said that new legislation was imperative for introducing reforms in the public finance management sys­tem for efficient allocation of resourc­es and transparency in the budgeting process in the province. 

The minister said that during the budgeting process under the Public Finance Management Act, the alloca­tion of funds will be done based on outputs. “Along with the allocation of funds in the budget, their goals and the period of their achievement will also be determined which will ensure improvement in the perfor­mance of the departments. The Act also includes a chapter on fiscal risk aimed at controlling the budget defi­cit and it sets a debt ceiling that will ensure the soundness of the debt management system”, he explained. 

He further stated that the funds which lapsed every year shall be made part of the provincial fund and these funds shall be utilized for the purposes for which they were earmarked when necessary. He said the institutions running on government grants and subsidies will be made self-sustaining. “Under the Act, two accounts will be opened in the State Bank, one for the public fund and the other for the trea­sury. The revenue collected from the persistently loss-making institutions will be part of the treasury funds of the government. A single treasury ac­count will improve the cash flow of the government and make the budget more efficient”, he explained. 

He said the Act envisaged report­ing the assets of autonomous institu­tions so that the government knows where the money was coming from these institutions. In addition to this, the frozen assets in the accounts of the institutions will be mobilized to in­crease government resources, he said. Among the others, Debt Management Unit and Sub-National Governance Program Supervisor Abdul Rahman Waraich and relevant officers of the fi­nance department were also present.