MEDIUM TERM BUDGETARY FRAMEWORK

Punjab Resource Management Program is mandated to initiate financial reforms for better resource management so that necessary fiscal space for improved service delivery could be created. Medium Term Budgetary Framework is one such mode/system of fiscal spending which promotes efficiency and better utilization of financial assets. It is a system for making the budget process more strategic and responsive to the priorities of the government, by introducing a medium term horizon to the budgetary process. The principal objectives of the MTBF are:

• To further strengthen fiscal discipline in managing budget of the government.

• To strengthen the alignment of budgetary allocation and expenditures with the policies and priorities of the government, and

• To strengthen the process of budgeting and budget resource management within the departments so as to ensure efficiency and cost-effectiveness of the use of public sector resources by line ministries/departments in the delivery of public services.

2. In order to achieve these objectives the MTBF is built on two main components:

1. A strategic or “top-down” component, which strengthens the overall management of resources and the alignment of the allocation of budgetary resources on the basis of government policies and priorities; and

2. A component of MTBF which aims to strengthen the budgetary management process within the line ministries. This is often referred to as the “bottom-up” component of the MTBF.

3.The MTBF reforms are mainly concerned with the budget preparation stage of the wider budget process. Under Punjab Efficiency Improvement Program (PGEIP), Government of the Punjab is committed to developing MTBF in 2 pilot departments. These are:-

• Health Department

• Irrigation & Power Department

However, it is important that the reforms introduced under the MTBF are seen in the context of a wider process of reform and modernization which will eventually affect all stages of the budget cycle and all stakeholders in the provincial budget. The MTBF reforms are one element of a package of reforms which together are intended to modernize budget management across the provincial government.

4. The MTBF mode of budgeting is going to be piloted in Irrigation and Power (I&P) and Health Departments. To further the process of Medium Term Budgeting and to strengthen and fully operationalize the MTBF Cell in Finance, Health and Irrigation & Power Departments, Government of the Punjab has engaged services of an international consultant to provide support to these departments. Along side services of 5-6 domestic consultants have been procured for operationalizing MTBF mode of budgeting in Finance Department, Health Department and Irrigation & Power Department and also to assist the international consultant.

5. A working group comprising of senior officers has been created to steer this reform intervention. This comprises of:-

1. Secretary, Finance Department

2. Secretary, Health Department

3. Secretary, Planning & Development Department

4. Secretary, Irrigation & Power Department

5. Additional Secretary (Budget), Finance Department

Further 2 core teams have also been notified in the pilot departments to support the reform process. A representative of Planning & Development Department (sectoral Chief) is represented in each core team to create synergies between current and development budgets and to pave the way for proper MTDF.

6. MTBF Budget Call Circular (BCC) has been issued by the Finance Department for the pilot departments. For capacity development of the staff of the pilot departments, Punjab Resource Management Program (PRMP) is planning to organize a total of ten dissemination workshops in various districts of the Punjab province spread over a period from November 2008 to December 2008. The participants will include selected officers i.e. Drawing and Disbursing Officers (DDOs) and Budget & Planning Officers from 250 spending units of the Health and Irrigation & Power Departments.

7. A detailed plan of three workshops is available here. In order to complete planning of the workshops and to discuss Budget Call Circular, a workshop was held on 8th November, 2008 in the committee room of PMU, PRMP. Representatives from I&P Department, Health Department as well as Finance Departments attended the proceedings. A detailed report of the same is available here.

Links

(1) FAQs
(2) Budget Call Circular (BCC)

i.   Proforma ADP (MTBF Mode)

ii.  Punjab Spending Unit Forms-v3.0-8 Nov 08

iii. Punjab Reappropriation Supplementary Surrender

iv.  Receipts & Posts Page 31 & 40

(3) Notification of Working Group
(4) Notification of Core Team
(5) Report of workshop