Bye bye Finance Ministry-Budget triggers revolution in budgetary system of Pakistan...

Bye bye to day-to-day interference of Ministry of Finance in the micro-management of line ministries. From Budget 2010-11, Government of Pakistan has introduced Medium Term Budgetary Framework. MTBF has a strategic element to budget-making and is a step-forward to modernize the existing incremental budgeting system. It may, however, take several years for full implementation. Its objectives include:

• Making the budget a flexible and responsive mechanism for carrying forward the policies, strategies and priorities,
• Introducing a progressive process of the empowerment of line ministries to manage their own budgetary cycles in an overall context which provides the maximum achievable level of predictability of resource flows,
• Shifting the role of the central agencies like Ministry of Finance and the Planning Commission in budget management from micromanagement of transactions to strategic management of the application of resources to achieve results.

This new budgetary approach helps planners and managers think through the logic of their intervention and how they relate to the ministry’s overall objectives. It requires that the ministry specify how its activities, outputs and outcomes are linked. This logic can then be tested by asking a series of “if-then” questions like:
If inputs (resources) are provided then activities can be undertaken. If activities are undertaken then outputs will be produced. If outputs are produced then outcomes will be achieved. If outcomes are achieved then the organization will have made progress towards achieving its overall goals.
The Goal means the overall objectives to which the ministry is aspiring. Summary of the goals is also called Vision Statement. Output is delivery of service or product and Activities are special tasks undertaken to achieve the required output. Inputs are resources required to undertake activities and Outcome is the result (or impact) of output on the target population.
Let us hope that MTBF will prove to be a welcome innovation.