Finance Ministry restricts supplementary grants under IMF conditions

ISLAMABAD: The Ministry of Finance has restricted supplementary grants for unbudgeted spending as part of Pakistan's commitments under the $7 billion International Monetary Fund Extended Fund Facility, according to ministry documents.

Under the new policy, ministries and government departments cannot seek supplementary grants beyond the limits approved by Parliament, except in cases of severe natural disasters. Minute Mirror reported that other exceptional circumstances may also be considered, while ProPakistani, citing the circular, said the exception is limited to severe natural disasters.

The Budget Wing of the Finance Ministry has issued guidelines for reappropriation, Technical Supplementary Grants and Supplementary Grants for the current and future fiscal years. Departments must first try to meet additional spending through reappropriation within authorised financial powers, but funds from unreleased budget allocations cannot be reappropriated.

If these options are insufficient, Principal Accounting Officers must submit a detailed justification for a supplementary grant. The Expenditure Wing will scrutinise requests before they are sent to the Budget Wing for further assessment. For Technical Supplementary Grants, officers must identify resources from other demands and provide a certificate confirming an equivalent surrender by the concerned officer.

ProPakistani reported that the Finance Division has provided additional funds under separate cost centres for payment of the Ad hoc Relief Allowance 2026. Principal accounting officers can reappropriate these funds only for this allowance during the third quarter of the current financial year, in consultation with the Expenditure Wing.

For shortfalls in employee-related expenditure, funds can be reappropriated from non-employee related expenditure heads on a priority basis, provided released funds remain within the quarterly limits set under the Finance Division's fund release strategy.

Requests to relax the May 31 deadline will be considered only in specified cases, including adjustment of excess expenditure booked by Accounts Offices, shortfalls in employee-related expenditure and unavoidable payments due in June. Such requests must involve orders already approved by the competent authority.

The instructions were issued under Article 84 of the Constitution and Section 10 of the Public Finance Management Act, 2019. They apply to all principal accounting officers, ministries, departments, subordinate offices, accounting organisations and other relevant government offices.