Farooq Awan

The government has outlined a comprehensive set of public financial management reforms aimed at strengthening fiscal discipline, improving budget credibility and enhancing transparency in the use of public resources, according to the Prime Minister’s Economic Governance Reforms (PM-EGR) document.

The reform agenda recognises that weaknesses in public financial management have historically constrained effective policymaking and limited the government’s ability to allocate resources efficiently. To address these challenges, the government has proposed a series of measures designed to improve budget formulation, execution and oversight across federal institutions.

A key component of the reform programme focuses on strengthening the budget preparation process. The document highlights the need for closer alignment between national development priorities and budgetary allocations. It emphasises the adoption of medium-term budgeting frameworks to ensure greater predictability in public spending and to link policy objectives with available fiscal resources.

The reforms also seek to enhance expenditure control mechanisms to prevent cost overruns and unplanned spending. Improved cash management systems, better expenditure tracking and strengthened internal controls are among the measures proposed to ensure that public funds are used efficiently and in line with approved budgets. These steps are intended to reduce fiscal slippages and improve overall budget discipline.

Another important element of the reform agenda is improving financial reporting and accounting standards across government entities. The document highlights the need for timely, accurate and transparent financial reporting to support informed decision-making and effective oversight. Strengthening accounting systems and harmonising reporting standards are expected to improve fiscal transparency and accountability.

The reforms also place emphasis on enhancing coordination between federal and provincial governments in managing public finances. Improved information sharing and harmonisation of financial practices are seen as critical to ensuring consistency in fiscal management across different levels of government. This coordination is expected to support better resource allocation and reduce inefficiencies arising from fragmented fiscal operations.

In addition, the reform framework underscores the importance of strengthening audit and oversight mechanisms. Enhancing the role of internal and external audit institutions, improving follow-up on audit findings and reinforcing accountability structures are identified as key steps toward ensuring prudent management of public funds.

According to the Finance Division, the public financial management reforms are central to achieving fiscal sustainability and improving the credibility of government finances. By strengthening budgeting, expenditure control and oversight mechanisms, the reforms aim to create a more transparent, accountable and efficient public financial system capable of supporting long-term economic stability and development.

Credit: INP-WealthPk