LAHORE: The Punjab government has yet to form the new Provincial Finance Commission (PFC) to lay down a formula for distribution of resources among the district governments and the provincial government to meet their expenditures. The announcement became due in June 2009.
Under the rules of business the PFC constitution requires the Governor’s approval. The governor is also the competent authority to nominate three private members of the commission.
Rafiq Ahmed Leghari, a former district nazim, said that the PML-N led government wanted to leave the chief minister to decide the allocation of resources. “How can the government has a claim to good governance practices if it isn’t ready to follow the rules and let everyone enjoy their mandate?” he inquired.
After the PFC expired on June 2009, the Finance Department on request of the Local Government and Community Development Department submitted a summary to the Chief Minister’s Secretariat to constitute a new PFC. The summary was returned after the CM’s Secretariat appointed the three members without seeking governor’s consent. The Finance Department sent it back objecting that the governor’s consent was not secured for the appointments. It is still pending with the Local Government and Community Development Department. The government seems to be delaying it to prevent the governor from exercising his legal authority, a CM Secretariat official said.
Leghari said that the PFC (2006-09) prioritised the under-developed districts. They were given relatively more funds for the development of health, sanitation, water supply facilities and education, he said. He added that at present most of the funds were being spent in relatively developed districts like Lahore.
“Bahawalpur, Multan and Dera Ghazi Khan combined got Rs5 billion in 2010-11 budget, while a single project in Lahore is consuming more than that amount,” he remarked.
Tariq Bashir Cheema, another former district nazim, said that while everyone made a lot of hue and cry over the National Finance Commission, no one seemed concerned about the PFC.
Tanveer Ashrif Kiara, the provincial finance minister, who is also the chairperson of the PFC, said that an interim PFC had been adopted to distribute resources among the stakeholders. He said that a new Local Government Ordinance was being prepared after which the PFC would be announced
On the pattern of the NFC award, poverty, population, backwardness and area would be the benchmarks for distribution of resources under the new PFC, he said.
Kaira refused to comment on the suggestion that differences between the governor and the provincial government were a hurdle in the way of the new PFC.
According to the Section 120-A of the Punjab Local Government Ordinance of 2001, the governor is the competent authority to constitute a PFC to make recommendations for distribution of net proceeds of the Provincial Consolidated Fund resources among the provincial and the local government.
The last PFC was formed by the former governor, Lt Gen (r) Khalid Maqbool, in 2006. It came into existence on July 1 and ceased to be on June 30, 2009.
The provincial share under that PFC was kept at 58.1 per cent. The district governments’ share was 41.9 per cent of the net proceeds.
Article 4 of the LG ordinance further direct that the resources be distributed among the city district/district governments, tehsil/town municipal administrations and the union administrations under the following formula –83.81 per cent, 12.5 per cent and 3.69 per cent respectively.
The 10 members of the PFC include secretaries of finance, local government and community development, law and parliamentary affairs, planning and development, a representative each of the district, tehsil and union council administrations and three experts financial affairs. The provincial finance minister is the chairperson of the commission.
The governor had the discretion of appointing the six non-government members including three finance experts and the district, teshil and union administrations’ representatives.
Published in The Express Tribune, July 23rd, 2010.