IMF conditions tighten rules for supplementary grants

IMF conditions tighten rules for supplementary grants

ISLAMABAD: The Ministry of Finance has decided to restrict supplementary grants for unbudgeted expenditures as part of the government’s efforts to meet the conditions of the International Monetary Fund’s (IMF) $7 billion Extended Fund Facility (EFF) programme.

Under the new policy, ministries and government departments will not seek supplementary grants for additional expenditures beyond the limits approved by Parliament in the federal budget, except in cases involving severe natural disasters or other exceptional circumstances.

The Budget Wing of the Ministry of Finance has also developed a framework for the re-appropriation of funds and the provision of additional financing during the current fiscal year. The strategy aims to ensure greater financial discipline and prevent government departments from exceeding their approved budgetary allocations.

According to the guidelines, departments must first explore the possibility of meeting additional financial requirements through re-appropriation of existing funds. They may also seek Technical Supplementary Grants (TSGs) where applicable.

However, when neither re-appropriation nor a TSG can meet the required expenditure, the concerned Principal Accounting Officer (PAO) will have to submit a detailed justification for seeking a supplementary grant.

The ministry has directed PAOs to provide solid and acceptable reasons explaining why the additional expenditure could not be managed within the approved budget. Authorities will examine such requests before considering any supplementary allocation.

The new guidelines will apply during the current financial year as well as in future fiscal years. They will cover all Principal Accounting Officers, ministries, departments, government institutions, subordinate offices, accounting organisations and other relevant government offices.

The move forms part of broader efforts to strengthen budgetary controls, improve expenditure management and ensure that government spending remains aligned with the approved fiscal framework and commitments under the IMF programme.