Budget Process PUNJAB

7/25/2019 Budget Process PUNJAB

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BUDGETARY PROCESS

09thDecember, 2015

Management & Professional Development Department


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CONCEPTUAL FRAMEWORK


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Simply conceptualized, a budget is an estimate of an

organisations receipt and expenditure over a givenperiod, normally a financial year of Gregorian

Calenar, as defined in Article 240 and 262 of the

onstitution

Although macroeconomic policy is essentially thedomain of the !ederal "overnment, ho#ever, the

$rovincial "overnment %udgets must also be #ell&

aligned #ith federal governments ob'ectives to promote

economic stability, create employmentopport!nities, control inflation, accelerate the pace of

economic evelopment and alleviate poverty

(he budget provides the fiscal mechanism to achieve

these goals

C"#C$P%'( )*'M$+"* ") P*"-.#C.'(

/DG$%


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CONSTITUTIONAL PROVISIONS


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All revenues received by the$rovincial "overnment, all loans

raised by that government, and all

monies received by it in repayment ofany loan, shall form part of a

Consoliate )!n,to be )no#n as

$rovincial onsolidated !und PC)

Article 118 of the Constitution

CONSOLIDATED FUND


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All other monies*a+ received by or on behalf of the

$rovincial "overnment

b+ received by or deposited #ith the ighourt or any other ourt established

under the authority of the $rovince

shall be credited to the P!blic 'cco!ntP'

Article118 of the Constitution

CONSOLIDATED FUNDContinued


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(he custody of the $rovincialonsolidated !und, the payment of

moneys into that !und, the #ithdra#al of

moneys there from, the custody of other

moneys received by or on behalf of the

$rovincial "overnment, their payment

into, and #ithdra#al from, the $ublic

Account of the $rovince,

MANAGEMENT OF PUBLIC FUND

Continued


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and all matters connected #ith orancillary to the matters aforesaid,

shall be regulated by Act of

$rovincial Assembly or, untilprovision in that behalf is so made,

by rules made by the "overnor-

MANAGEMENT OF PUBLIC FUND

Article119 of the Constitution


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'##'( /DG$% %'%$M$#%'/

.+ (he $rovincial "overnment shall, in

respect of every financial year, cause tobe laid before the $rovincial Assembly a

statement of the estimated receipts and

expenditure of the $rovincial"overnment for that year, in this hapter

referred to as the Annual %udget

Statement

ANNUAL BUDGET STATEMENT

continued


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ANNUAL BUDGET STATEMENT

'##'( /DG$% %'%$M$#% '/

2+(he Annual %udget Statement shall sho#

separately/&

a+ the sums reuired to meet expenditure

described by the onstitution as expenditurecharge upon the $rovincial onsolidated

!und* and

b+ the sums reuired to meet otherexpenditure

proposed to be made from the $rovincial

onsolidated !und*

and shall distinguish expenditure on reven!e

acco!ntfrom other e3penit!reArticle120 of the Constitution


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CHARGED EXPENDITURE

$3penit!re charge !pon )eeral Consoliate )!n

(he follo#ing expenditure shall be expenditure chargedupon the !ederal onsolidated !und/&

1a+ the remuneration payable to the $resident and

other expenditure relating to his office, and the

remuneration payable to&i+ the udges of the Supreme ourt*

ii+ the hief 3lection ommissioner*

iii+ the hairman and the eputy hairman*

iv+ the Spea)er and the eputy Spea)er of the

5ational Assembly*

v+ the Auditor&"eneral*

Articles 81 of the Constitution


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CHARGED EXPENDITURE

b+ the administrative expenses, including the

remuneration payable to officers and servants of theSupreme ourt, the department of the Auditor&

"eneral and the ffice of the hief 3lection

ommissioner and of the 3lection ommission and

the Secretariats of the Senate and the 5ationalAssembly*

c+ all debt charges for #hich the !ederal "overnment

is liable, including interest, sin)ing fund charges, the

repayment or amortization of capital, and otherexpenditure in connection #ith the raising of

loans, and the service and redemption of debt on

the security of the !ederal onsolidated !und*


Continued


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CHARGED EXPENDITURE

d) any sums required to satisfy anyjudgment, decree or award againstPakistan by any court or tribunal; and

e) any other sums declared by the

Constitution or by Act of [Majlise !hoora"Parliament)# to be so charged$


Continued


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CHARGED EXPENDITURE

$3penit!re charge !pon Provincial Consoliate )!n

(he follo#ing expenditure shall be expenditure chargedupon the $rovincial onsolidated !und/

a+ the remuneration payable to the "overnor and other

expenditure relating to his office, and the

remuneration payable to /&i+ the udges of the igh ourt* and

ii+ the Spea)er and eputy Spea)er of the

$rovincial Assembly*

b+ the administrative expenses, including theremuneration payable to officers and servants, of the

igh ourt and the Secretariat of the $rovincial

Assembly*


Continued


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CHARGED EXPENDITURE

$3penit!re charge !pon Provincial Consoliate )!n4

c+ all debt charges for #hich the $rovincial "overnmentis liable, including interest, sin)ing fund charges, the

repayment or amortization of capital, and other

expenditure in connection #ith the raising of loans, and

the service and redemption of debt on the security of the$rovincial onsolidation !und*

d+ any sums reuired to satisfy any 'udgment, decree

or a#ard against the $rovince by any ourt or tribunal*

ande+ any other sums declared by the onstitution or by Act

of the $rovincial Assembly to be so charged-


Continued


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DESCRIPTION

/DG$% $%.M'%$

(he statement of the estimated receipts

into, and the estimated expenditure from,

the $rovincial onsolidated !und, for a

financial year, reuired to be laid before the$rovincial Assembly, before the

commencement of that year, under

Article.20 1.+ of the onstitution-


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DESCRIPTION

D$-$("PM$#% /DG$% $%.M'%$

(he development budget reflects investment #ith

the follo#ing basic characteristics/&

1i+ =t is designed to )eep intact, enlarge

and improve the physical resources ofthe country*

1ii+ =t improves the )no#ledge, s)ill, and

productivity 1(raining+ of the uman

:esource* and

1iii+ 3ncourages efficiency in utilization

of available resources-


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DESCRIPTION

D$-$("PM$#% /DG$% $%.M'%$

o#ever, some expenditures, particularly relating to3ducation and ealth, #hich despite their having the

development characteristics, are not treated as

development expenditure, e-g- expenditure on staff for

ne#ly established schools or colleges, #hich can beconsidered as investment in human resource, is not

treated as development expenditure, although it has the

basic characteristics of development expenditure- (he

reasons for deviation in such cases is that such

expenditure is treated as normal activities of the

department, and is, primarily, of permanent nature and is,

therefore, met from current budget-


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DESCRIPTION

DEVELOPMENT BUDGET (REVENUE)

(he funds allocated under development

budget and the expenditure incurred on

account of establishment charges or

procurement of goods ; services etc is

termed as 7Development *even!e

/!get6


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What is a Bud!t"

$reviously the %udget #as referred to

7>ings bag :epresented the resources available to

>ing for public use, if so desired

3xpended according to 7State $riorities,1as per >ings #ill+

5o# in modern era this term extends to/ 3stimating :evenues

$lanning 3xpenditures


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PUBLIC SERVICE MANAGER#S PERSPECTIVE


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BUDGET$ GOVERNMENT#S PERSPECTIVE

8sed as a 7tool for implementing policy decisions*

Analyzing policies implemented*

3nsuring 7public service delivery*


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/!get $stimates )8 20121:

Summary

*$C$.P% $;P$#D.%*$

Description /$ 201112 *$ 201112 /$ 20121: Description /$ 201112 *$ 201112 /$ 20121:

*even!e *eceipt


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CHALLENGES INBUDGETING


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CHALLENGES IN BUDGETING

9ac) of information on costing of Policies,Programsand ervices

$rimary focus on inp!tsinstead of o!tp!ts

hortterm horizon for budget ma)ing ignoringlongtermcosts and benefits

9ac) of strategic foc!sand articulation of sectoral

priorities in budgetary process

$erformance 'udged largely by matching spening#ith budget appropriation


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CHALLENGES IN BUDGETING

uman resource 1capacity issues+

Gea) forecasting 1scarcity of ualified staff+

apacity to generate monthly and uarterly reports

Ad hoc commitments to targets

=nput based budgeting 1incremental budget+


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HOW TO BUDGET"


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TOOLS FOR BUDGET MAKING


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BUDGET CALL CIRCULAR


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BUDGET CALL CIRCULAR

ontents of %*

overing 9etter

"lossary of terms

=ntroduction to


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CALENDAR OF KEY ACTIVITIES

r4 A 'ctivitiesCompletion

Dates 'ppro34

1 .ss!ance of M%/) /!get Call Circ!lar to PilotDepartments

20th'!g!steach year

2 .ss!ance of inicative /!get Ceilings for C!rrentan Development /!get

10th#ovembereach year

: .entification of ector Priorities as part of *apiector *evieB

12th

Decembereach year

= Completion of meetings betBeen )D, P&D, PilotDepartments@ DD"s an M%/) %eam for preparationof M%/) /aseline /!gets4

2


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#eB 'cco!nting Moel


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NEW ACCOUNTING MODEL

'(.$#% )$'%*$


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ENTITY ELEMENT


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ENTITY ELEMENT

(he entity means the organizational structure or

unit #hich create the transactions-

(he organizational highest level is "overnment ;

lo#est level is ra#ing ; isbursing fficer 1+E

ollecting fficer 1+


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ENTITY ELEMENT CODES


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ENTITY ELEMENT CODES

$ @4 ommunication

; Gor)s eptt-

@.00 ommunication ;

Gor)[email protected]. hief Architect,

$un'ab

@.02 hief 3ngineer%uilding 15orth+

@.0 hief 3ngineer%uilding 1South+

@.04 hief 3ngineerigh#ays 15orth+

@.0@ hief 3ngineerigh#ays 1South+

FUNCTION ELEMENT


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FUNCTION ELEMENT

(he economic function, relating to the provision of

a particular service, activity or "overnment

program- (he function code have been designed

conforming to =

reuirements


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FUNCTION ELEMENT HIERARCHY


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FUNCTION ELEMENT HIERARCHY

(he !unction 3lement is further divided into follo#ing

components*

Ma7or )!nction

Minor )!nction

Detaile )!nction

!bDetaile )!nction

Programme


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FUNCTION ELEMENT $ EXAMPLE

An example of the !unction 3lement is sho#n as under*


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OB%ECT ELEMENT

(he accounting classification, describing the itemof expenditure, receipt, asset or liability- 3ach

accounting classification is further sub&divided

into a hierarchy, do#n to the level of detailed

ob'ect head-


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OB%ECT ELEMENT CODES


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OB%ECT ELEMENT $ CODES

Capital *eceipts3 0. :ecoveries of =nvestment

3 02 :ecoveries of 9oans and Advances

3 0 ebt'ssets

! 0. ash and %an) %alances

! 02 :eceivables

! 0 $hysical Assets

! 04 =nvestments

! 0@ ther Assets

*eceipts



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(iabilities

" 0. urrent 9iabilities

" 02 9oans

" 0 eferred 9iabilities

" 04 ther 9iabilities" 0@ ontrol Accounts

" 06 (rust Account&!und

" 0C (rust Account&$ost ffice

" 0D (rust Account&:ail#ays

" 0B (rust Account&(;(

" .0 (rust Account&ther

" .. Special eposit =nvestment



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" .2 Special eposit !und

" . Special eposit "rant

" .4


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OB%ECT ELEMENT$$ EXAMPLE

Accounting 3lement A F 3xpenditure


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BUDGET ESTIMATE


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BUDGET ESTIMATE

!ormulated on the basis of A$ prepared by the

$lanning ; evelopment epartment by the

!inance epartment

Allocations are reflected on the basis of function&cum&ob'ect classification 1minor ob'ect level+ ; scheme&

#ise

(he :evenue ; apital expenditures are

allocated under separate grants-

Development /!get


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APPROVAL OF BUDGET ESTIMATES


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APPROVAL OF BUDGET ESTIMATES

(he %udget 3stimates, after approval by the abinet,are laid before the Assembly, for discussion E vote, on

the date fixed for the purpose, #hich should be

sufficiently earlier than the date of commencement of

the financial year to #hich it relate


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SCHEDULE OF AUTHORIZED EXPENDITURE


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b+ under 'rticle 12:i of the Constit!tion,get

it authenticated by the hief


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DISTRIBUTION OF BUDGETAND GRANTS

DISTRIBUTION OF BUDGET AND GRANTS


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DISTRIBUTION OF BUDGET AND GRANTS

n approval of the %udget 3stimates by the

provincial Assembly, the allocations against a grant

are placed at the disposal of the ead of

epartment on .stuly for its further disbursement

to the lo#er tiers-

n implementation of the GA5 under $=!:A, the

allocations #ould be placed on&line through SA$

system at the disposal of the ead of epartments

1controlling s+ for further placing it on&line atthe disposal of the spending s-


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BUDGET PUBLICATIONS


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BUDGET PUBLICATIONS


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BUDGET PUBLICATIONS

e+ Ghite $aper&explanation of financial

position of provincial government, activitiesof various functionsEdepartments ;detailed notes on receiptsEexpenditure

f+ %udget Speech

g+ Supplementary %udget

h+ Schedule of ontinued and 5e#3xpenditure F1urrent+

(Para 3.2 of Budet !anual)


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Tha)* Y+u

Documents

Budget Process PUNJAB