ISLAMABAD  -  Following recommendation of the In­ternational Monetary Fund (IMF), the federal government is planning to prepare multi-year indicative budget ceilings on the overall development budget, starting from the Fiscal Year 2024-25 (PSDP), instead of the existing annual based development budget ceil­ing strategy.

Similarly, the Planning Commission will also make it obligatory to obtain independent security of major project proposals, including around cost esti­mation and increase transparency of project appraisal documents, as rec­ommended by IMF, official source told The Nation.

The government is working on adop­tion of action plan recommended un­der IMF technical report on Pakistan Public Investment Management As­sessment (PIMA) and Climate PIMA.

IMF in its technical report on invest­ment allocation has pointed towards the issue of the budget framework which does not establish a strong basis of the planning and execution of capi­tal expenditure. It was recommended to set multi-year indicative budget ceil­ings by the ministry.

It has been planned to prepare mul­ti-year indicative budget ceilings on the overall development (PSDP) budget. A bottom-up approach (based on exist­ing PSDP commitments) should com­plement the current top-down ap­proach based on resource availability. Finance Division should also indicate the split between the current PSDP and the space available for new pro­jects. Use multi-year indicative budget ceilings to prepare multi-year ceilings. These ceilings should be included in the Project Call Circular.

Similarly it was also recommended that examine scope to reduce the with­in year adjustment of capital expendi­ture (including restricting the ability to add new projects through supplemen­tary grants or virements). The plan­ning action on the part of the Finance Division is to review rules to restrict the ability of agencies to fund projects not formally approved as part of the budget Review rules for supplementa­ry grants for development projects.

Another issue pointed out was per­taining to the insufficient informa­tion on the investment budget. It was recommended to improve transpar­ency by presenting in budget docu­mentation summary information on key aspects of the PSDP. The action under consideration includes to de­velop the format and location of the presentation in budget documents. Include this summary information using the new format in the FY24-25 Budget.

To further strengthen the appraisal of the projects, IMF had recommend­ed for continuation plans to obtain in­dependent security of major project proposals, including around cost esti­mation and increase transparency of project appraisal documents.

The Planning Commission will work to determine which projects should be subject to scrutiny by independent ex­perts.

Similarly, another issue pointed out regarding substantial investment un­dertaken by autonomous entities that are not subject to ordinary investment procedures should they use their own revenue. It was recommended to for­malise processes to obtain information on projects funded from sources other than the PSDP and present aggregate information on the public sector in­vestment program in the budget show­ing major federal projects and their costs regardless of financing source.

Now the Planning Commission will review powers to obtain information on investment projects across funding sources and identify any needed legis­lative amendment.

It was also recommended to imple­ment the central monitoring system for SOEs and establish guidance for over­sight/information exchange on SOE in­vestment plans.

The Finance Division will put in place mechanisms for reporting on SOE fis­cal risks related to public investments eg PPPs and other contingent liabilities by September 2024. Subject to devel­opment of SOE ownership policy, put in place mechanisms for coordination on SOE projects of national significance