In Pakistan’s quest to enhance public service delivery, Public Financial Management (PFM) reforms have emerged as a critical lever to ensure allocated funds translate into tangible outcomes. By streamlining budgeting processes, enhancing transparency, and tightening expenditure controls, these reforms aim to bridge the gap between fiscal planning and service quality. However, the journey from improved financial management to better healthcare, education, and infrastructure remains fraught with systemic challenges. While digital platforms and stricter audits have reduced leakages, the human and institutional barriers to equitable service access persist.
PFM Reforms: Catalyzing Efficiency Gains
Key reforms, such as the Treasury Single Account (TSA) and digitized budgeting systems, have reshaped fiscal governance. The TSA’s consolidation of 70,000+ government accounts into a unified system freed up ₨120 billion annually in idle funds, redirecting resources to priority sectors. Punjab’s e-Budgeting portal, for instance, reduced payment processing times from 120 to 75 days, accelerating project execution.
Impact on Service Delivery Metrics (2019–2023)
| Indicator | Pre-Reform (2019) | Post-Reform (2023) |
|---|---|---|
| Healthcare Fund Utilization | 58% | 72% |
| School Enrollment Growth | 2.1% annually | 4.5% annually |
| Road Project Completion | 42% on-time | 67% on-time |
Sector-Specific Breakthroughs
- Healthcare: Punjab’s MTBF-aligned health budgets reduced maternal mortality by 19% (2020–2023) through predictable funding for rural clinics.
- Education: KP’s digitized fund tracking boosted middle-school enrollment by 22% in merged districts, as delayed stipend payments dropped from 8 to 3 months.
- Infrastructure: Sindh’s IFMS-enabled real-time expenditure monitoring cut road project cost overruns from 34% to 18%, though quality audits remain inconsistent.
The Accountability-Access Gap
Despite efficiency gains, service quality often lags due to:
- Capacity Deficits: Only 30% of health facilities in Balochistan meet staffing norms, despite a 40% rise in allocated funds.
- Fragmented Data: Punjab’s school upgrade projects lack integration with teacher training databases, perpetuating skill gaps.
- Political Prioritization: Sindh’s diversion of ₨55 billion from MTBF-backed health projects to ad-hoc infrastructure in 2022 diluted long-term outcomes.
A 2023 AGP audit of 50 hospitals revealed ₨9.3 billion in misreported equipment purchases, underscoring persistent oversight gaps even after PFM reforms.
Navigating the Last Mile Challenges
To convert fiscal efficiency into service quality, policymakers must address:
- Human Capital Investment: Train 100,000+ frontline workers in healthcare and education via PPP models, as piloted in KP’s “Tech-Enabled Teachers” initiative.
- Integrated Monitoring: Link PFM systems (e.g., IFMS) with service delivery dashboards, tracking outcomes like patient wait times or student retention.
- Community Participation: Embed citizen feedback loops in budget cycles, as seen in Punjab’s “Citizen Voice Committees” for school upgrades.
The 2024 federal decision to tie 10% of provincial transfers to service quality metrics—measured via third-party surveys—offers a template for accountability.
From Fiscal Discipline to Public Trust
PFM reforms have undeniably tightened Pakistan’s financial management, but their true test lies in delivering visible improvements in citizens’ lives. As climate shocks and population growth strain resources, the next phase of reforms must prioritize not just where funds go, but how they transform everyday realities. The stakes are clear: in a nation where 40% of the population lacks access to primary healthcare, PFM isn’t just about balance sheets—it’s about dignity.
This article was published on PublicFinance.pk.
