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Federal Medium Term Budget Estimates for Service Delivery 2010-13

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Federal Medium Term Budget Estimates for Service Delivery 2010-13 Preface The Medium Term Budget Estimates for Service Delivery set out in this document have been prepared under the newly adopted Medium Term Budgetary Framework (MTBF) for the Federal Government. The Budget Estimates for Service Delivery (BESD) constitute a response to the growing need for adequate documentation, at the time of the presentation of the budget, of the purposes for which Parliament is being requested to appropriate funds. The BESD provide supplementary information to the details which have long been provided through the Details of Demands for Grants and Appropriations – the so-called “Pink Book”, which sets out the details of the budget by accounting budget line according to the economic and functional classifications of the Chart of Accounts. The BESD, referred to as the “Green Book”, while presenting the same budget as the Pink Book, has a different orientation and purpose. The principal aim of the Green Book is to provide Parliament and other stakeholders with the clearest possible statement of the services which are to be delivered and the investments to be undertaken through the application of the funds appropriated by Parliament, and, equally important, the results which are expected to be achieved in terms of the achievement of goals of public sector activity and the benefits expected to accrue to different population groups from the activities of the federal Government. The publication of the Green Book marks a major step forward in enhancing the transparency of the federal budget The Green Book represents the initial results of the adoption of the MTBF in its first year of application. Attention is drawn to the following major innovations which are included in this Green Book: • The Green Book uses the 3-year framework for budgetary planning which lies at the heart of the MTBF reforms. Under this process ministries make their plans and prepare budgetary estimates for a rolling 3-year budgetary horizon. This includes the base year (in this case 2010/11, which forms the basis for the appropriation of the annual budget for 2010/11 by Parliament, and two additional or “outer” years (in this case 2011/12 and 2012/13) which represent projections of budget estimates for planning purposes. The outer year estimates are not appropriated, since they are only for planning purposes; • The centerpiece of the Green Book is the breakdown of each ministry or division’s budget by “Outputs”. Outputs represent major lines of service delivery of each ministry. In the preparation of the MTBF budgets each ministry has been requested to identify its main lines of service delivery and the costs associated with the delivery of each main line of service, down to the level of the individual spending unit. The presentation of the federal budget accordingly provides the i best estimate possible of what services each ministry of the federal Government is expecting to deliver in the coming one and three-year period, and the cost to public funds of each line of service delivery. The breakdown of the budget by outputs will facilitate the strategic allocation of scarce public resources to meet the highest priority areas of service delivery. It will also make it easier for Parliament and other stakeholders to assess whether the public is achieving value for money through the federal budget. • Attention is drawn to the fact that, while for accounting purposes, the government budget is divided between the recurrent budget and the development budget, the delivery of outputs or main lines of service usually requires a combination of allocations through the recurrent budget (to meet the current operations costs of service delivery) and allocations through the development budget to meet expenses of a capital nature which can provide for expansion of access to services or to improvement of the future quality of services delivered. Each output is conceived as a stream of services over time requiring both current and development spending. The adoption of this framework for budgetary planning is expected to lead to a closer harmonization in ministry spending plans of the requirements for recurrent and capital spending, both of which are critical for service delivery and development in a wider sense. • Besides identifying the lines of service delivery of each ministry, the Green Book also provides information on the indicators which should be used for measuring the quantity and quality of services (outputs) to be delivered. The Green Book also provides, for almost all areas of service delivery, specific targets for the levels of services which the ministries and divisions are expecting to achieve. Wherever possible, the targets have been set in quantitative terms. The targets are set in terms of the units of the indicators. An important purpose for adopting the system of budgetary preparation based on outputs/services, is to provide a basis, defined at the time of budget preparation, for monitoring, during budget execution, of the extent to which the results expected from public spending are, in fact, being achieved. • In addition to defining the services (outputs) to be delivered, the Green Book also identifies the outcomes which are expected to be achieved through public spending. Outcomes are related to, but distinct from the outputs or services actually delivered. Outcomes refer to the effects of service delivery on the target population of each line of service delivery. Outcomes are often more difficult to measure than outputs and are typically actually measured less frequently, often using different sources of information, such as the regular censuses and surveys undertaken by the Federal Bureau of Statistics. The specification of the expected effects of public spending in terms of outcomes for the population will also support the assessment of the effectiveness and efficiency of public spending. ii This is the first year of preparation of MTBF estimates by federal ministries and the procedures of implementation of output-based budgeting will need to be further strengthened in the coming budget cycles. SALMAN SIDDIQUE Secretary to the Government of Pakistan Finance Division Islamabad, June, 2010 iii Composition of this document This document presents medium-term (2010-13) budget estimates for service delivery of Federal Government by each Ministry separately. The budget 2010-11 is appropriated by the Parliament while the budget estimates for outer-years (2011-13) are provided for planning purposes. The budget estimates for outer-years are a result of a technical exercise completed by the Finance and Planning Divisions to provide predictability of resources on the recurrent and development budgets. The Cabinet at its meeting on 10th February 2010 approved the issuance of Indicative Budget Ceilings 2010-13 to all Federal Ministries for both recurrent and development budgets. For each Ministry the following information is presented: 1. Executive Authority: A name of an organisation/entity (e.g. Ministry / Division etc.) is provided. Each executive authority is headed by a Principal Accounting Officer. 2. Principal Accounting Officer(s): The designation and the name of the entity (e.g. Ministry / Division etc.) are provided. Where there are more than one Principal Accounting Officers (PAOs) in a Ministry, designations and related organisations are provided separately. 3. Goals(s): Goals of each entity (e.g. Ministry / Division etc.) have been provided separately. This is a high- level statement that provides an overall goal. 4. Budget by Outcomes: In this section the budget is presented for the medium term 2010 -13 which includes both recurrent and development by Outcomes for the Ministry. Also, a preliminary actual expenditures for 2008-09 and original budget for 2009-10 are presented for each outcome. 5. Strategic Overview: In this section strategic overview of the budget of each executive authority is presented. This overview is presented in a specific format addressing three main areas; a) Major achievements against the services delivered in 2008-09, b) Major challenges faced in 2008-09 and c) Medium term (2010-13) policy priorities of the executive authority. iv 6. Budget by Outputs: In this section the budget is provided for Outputs (Services Delivered) for each Outcome. Also, a preliminary actual expenditures for 2008-09 and original budget for 2009-10 are presented for each output. 7. Selected Performance Indicators and Targets by Outputs: In this section Indicators and Targets have been provided for each Output defined for three years (2010-13). Also, the original target is presented for 2009-10 and in some cases (where possible) actual achieved targets for 2008-09 are presented. 8. Budget by Input (Object Classification): In this section a medium term budget is shown by major heads of object classification. Also, a preliminary actual expenditures for 2008-09 and original budget for 2009-10 are presented by each major head of object classification. This table provides an analysis of inputs (resources) required to deliver the outputs and achieve the associated targets. 9. Progress of Selected Construction Projects: In this section progress of major construction projects undertaken by a ministry is shown. The progress is shown in the form of percentage completion cumulatively e.g. the outer years includes in addition to the progress made during those years, the percentage completion of the preceding years. 10. Demands for Grants: In this section the total number of demands and its numbers are shown as per the Pink Book for 2010-11. This table facilitates the reader in reconciling this document (Green Book) with the Pink Book for one year e.g. 2010-11 Note Please note that the Actual Expenditures shown in this document are based on preliminary estimated figures obtained from the ministries and Accountant General of Pakistan Revenue (AGPR). v Contents Pages 1. Cabinet Secretariat 1 2. Ministry of Commerce 41 3. Ministry of Communications 45 4. Ministry of Culture 49 5. Ministry of Defence 53 6.
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