ISLAMABAD, Feb 21: The Finance Ministry has started the budget-making exercise for the next financial year (2008-09). It asked the provincial governments, the federal ministries and the autonomous bodies to submit their budgetary requirements and statements by March 10, 2008, it is learnt.
All the principal accounting officers of provincial governments and the federal ministries are also required to submit their estimates of foreign exchange commitments and disbursements for the next fiscal year. This marks the beginning of the budget-making process to set the stage for decision making and new policy initiatives to be taken by the new government, Finance Ministry sources told Dawn on Thursday.
Over the past few years, a comprehensive proforma had been made part of the budget-making exercise for close monitoring of the balance of payment position under the Fiscal Responsibility and Debt Limitation Act. The authorities concerned have been asked to provide estimates of forex commitments and disbursements, both for physical imports and invisibles, so that the foreign exchange budget for the financial year 2008-09 could be prepared well in time.
A guideline issued to all the federal ministries, divisions, autonomous bodies of the federal government and the provincial governments said the development portion should be segregated from the current (non-development portion) expenditure. They are required to provide estimates of disbursements as accurately as possible on the basis of schedules of disbursements against the letters of credit (LCs) already opened and likely to be opened because any error in the calculations may distort the entire balance of payment projections.
Provisions for allocation from own resources could be included for the approved development schemes which have been included in the Annual Development Programme and for which part financing from own resources was approved by the Executive Committee of the National Economic Council (Ecnec), the Central Development Working Party or any other appropriate sanctioning authority.
All the relevant authorities have also been advised to make maximum efforts for use of foreign project assistance or commodity aid. The sources said that no lump-sum provision of foreign exchange proposal would be entertained and details of all items would have to be supported by documentation.
Similarly, no provision for expenditure in foreign exchange will be entertained for import of items which are manufactured within the country. Proposals for current expenditure (non-development) in foreign exchange shall be included in the estimates only after due consideration of the latest instructions on economy as well as regarding visits abroad.
The financial advisers of the agencies concerned have been asked to certify only those demands for foreign exchange which have corresponding rupee cover available in the budget. Similarly, they will also certify that development budgets for which forex allocation have been proposed are included in the Annual Development Programme for 2008-09 recommended to the Priorities Committee.
The sources said the schedule for Priorities Committee meetings would be finalised some time later with the coming into office of the new government but most probably such meetings would start by the end of March or early April. Usually, all estimates for development programme, both federal and provincial, are finalised by the first week of May. This is followed by the meetings of Annual Plan Coordination Committee (APCC) and National Economic Council (NEC) latest by the third week of May to approve development programme.
