ISLAMABAD: The Ministry of Finance has issued its budget fund release strategy for the 2026-27 fiscal year, outlining the mechanism for disbursing funds for development projects and current expenditures.
According to the Finance Ministry, the strategy has been formulated under the Public Finance Management Act and the Financial Management and Powers of Principal Accounting Officers Rules to ensure transparent and efficient budget execution.
Under the new framework, funds allocated under the Public Sector Development Programme (PSDP) will be released on a quarterly basis. As per the policy, 15 percent of the total development budget will be disbursed during the first quarter, followed by 20 percent in the second quarter, 25 percent in the third quarter, and the remaining 40 percent in the final quarter of the fiscal year.
The ministry clarified that PSDP funds will only be released after the relevant development projects receive approval from the Planning Commission’s Development Working Party (DWP).
Current expenditure allocations will also follow a quarterly release schedule. Government departments will receive 20 percent of their allocated funds in the first quarter, while 25 percent will be released in both the second and third quarters.
A separate mechanism has been introduced for the payment of salaries and pensions. Under this arrangement, 25 percent of the allocated funds will be released every quarter to ensure the timely disbursement of salaries and pension payments throughout the fiscal year.
The Finance Ministry has further directed that all expenditures related to the rupee cover for foreign currency-funded projects must receive prior budget allocation from the Ministry of Economic Affairs and the Finance Division before funds are released.
