Budget preparation process hits snags

Govt fails to prepare budget strategy paper, supposed to be approved in second week of April

ISLAMABAD:

 

Due to delay in a staff level agreement between Pakistan and the International Monetary Fund (IMF) as well as some other factors, the finance ministry is facing serious difficulties in the preparation of the federal budget for the upcoming financial year 2023-24.

Sources in the Ministry of Finance and the Federal Board of Revenue (FBR) said the federal government is facing difficulty in setting budget estimates due to volatility in the rupees-US dollar exchange rate; lack of financing to cover budget deficit as well as delay in completion of population census.

Presently, a digital census is under way whose deadline has been once again extended by 15 days.

Due to these factors, the government has not been able to prepare the budget strategy paper, which was supposed to be approved by the cabinet in the second week of April.

The budget strategy paper presents strategic priorities of the government's revenue and spending policies and specifies indicative spending levels for various divisions and offices of the federal government.

The 2023 annual budget is planned to be presented before the federal cabinet and the parliament in the first week of June.

A meeting of the Annual Plan Coordination Committee (APCC) has not been convened yet. The meeting of the National Economic Council (NEC) regarding the budget will be held in the first week of May.

Working under the Planning Commission, the APCC plays an important role in the approval process of the development budget.

According to the sources, as per the initial schedule, the budget strategy paper was to be approved by the cabinet in the second week of April. “The budget is likely to be prepared in the light of IMF guidelines,” said a source.