By the people: Will local govts lack fiscal autonomy?
Division of funds will happen through the PFC: Pasha
Division of funds will happen through the PFC: Pasha. CREATIVE COMMONS
LAHORE:
Former district government members and prospective candidates for the upcoming local elections fear that local governments elected under the new law will lack financial autonomy. They say most of the services delivered by them in the past have been transferred to newly established authorities and companies accountable to the provincial government.
They say that besides transfer of funds by the province, the Punjab Local Government (Amendment) Ordinance of 2013 also empowers local governments to generate revenue on their own. A local government can generate revenue by collecting taxes, cess, tolls, market committee fees and rents on its property and by providing services like piped water, health and education. While the law allows a local government to collect taxes, they say it can do so only after obtaining provincial government’s approval for the purpose.
They say the newly established authorities and companies for provision of services like education, health, waste management, public transport, potable water, car and motorcycle parking, management of cattle and livestock markets are all answerable to the provincial government. With re-organisation of authorities like the Lahore Development Authority at the divisional level, these too will no longer be under the control of local governments, they add. Farooq Amjad Mir, a former naib nazim of Lahore, says that the elected local governments will have no power over the newly established authorities and companies. The role of elected governments under the new law shall thus be ‘ceremonial’, he says. He says the new law will not devolve powers to the local level.
He cites the example of proposed education and health authorities and says that these will be headed by a chief executive officer appointed by the provincial government. He says the CEO will be responsible for all major decisions including budget preparation and planning for future.
Finance Minister Dr Ayesha Ghaus Pasha, however, says that service delivery will improve with the establishment of new companies and authorities. She says the organisation of the new companies and authorities is similar to corporations and hopes that this will yield in more efficient delivery of services.
Dr Pasha dismisses the suggestion that the new companies are not answerable to elected representatives. She says the Punjab Assembly will have the power to review the operations of the companies. She adds that she expects that the elected representatives at the district level shall also have such powers. About allocation of funds to local governments, Dr Pasha says that a Provincial Finance Commission (PFC) will be established to lay down a formula for division of funds among the districts. She says the formation of the PFC will take place after local government elections in the province. “There is no need to worry about their [local governments] financial autonomy at the moment,” she says.
Audit of local government accounts
Under the new law, local governments will be required to get their accounts certified by the Auditor General of Pakistan every year. The audit report will then be presented before the Public Accounts Committee of the Punjab Assembly.
The provincial government is authorised to hold a special audit of local government accounts through the Provincial Director Local Fund Audit or any other audit agency if it is not satisfied with the audit report.
Based on the audit report, the law authorises the provincial government to order an inquiry through the Punjab Local Government Commission and take action against the local government based on the findings of the inquiry.
Published in The Express Tribune, August 25th, 2015.
Former district government members and prospective candidates for the upcoming local elections fear that local governments elected under the new law will lack financial autonomy. They say most of the services delivered by them in the past have been transferred to newly established authorities and companies accountable to the provincial government.
They say that besides transfer of funds by the province, the Punjab Local Government (Amendment) Ordinance of 2013 also empowers local governments to generate revenue on their own. A local government can generate revenue by collecting taxes, cess, tolls, market committee fees and rents on its property and by providing services like piped water, health and education. While the law allows a local government to collect taxes, they say it can do so only after obtaining provincial government’s approval for the purpose.
They say the newly established authorities and companies for provision of services like education, health, waste management, public transport, potable water, car and motorcycle parking, management of cattle and livestock markets are all answerable to the provincial government. With re-organisation of authorities like the Lahore Development Authority at the divisional level, these too will no longer be under the control of local governments, they add. Farooq Amjad Mir, a former naib nazim of Lahore, says that the elected local governments will have no power over the newly established authorities and companies. The role of elected governments under the new law shall thus be ‘ceremonial’, he says. He says the new law will not devolve powers to the local level.
He cites the example of proposed education and health authorities and says that these will be headed by a chief executive officer appointed by the provincial government. He says the CEO will be responsible for all major decisions including budget preparation and planning for future.
Finance Minister Dr Ayesha Ghaus Pasha, however, says that service delivery will improve with the establishment of new companies and authorities. She says the organisation of the new companies and authorities is similar to corporations and hopes that this will yield in more efficient delivery of services.
Dr Pasha dismisses the suggestion that the new companies are not answerable to elected representatives. She says the Punjab Assembly will have the power to review the operations of the companies. She adds that she expects that the elected representatives at the district level shall also have such powers. About allocation of funds to local governments, Dr Pasha says that a Provincial Finance Commission (PFC) will be established to lay down a formula for division of funds among the districts. She says the formation of the PFC will take place after local government elections in the province. “There is no need to worry about their [local governments] financial autonomy at the moment,” she says.
Audit of local government accounts
Under the new law, local governments will be required to get their accounts certified by the Auditor General of Pakistan every year. The audit report will then be presented before the Public Accounts Committee of the Punjab Assembly.
The provincial government is authorised to hold a special audit of local government accounts through the Provincial Director Local Fund Audit or any other audit agency if it is not satisfied with the audit report.
Based on the audit report, the law authorises the provincial government to order an inquiry through the Punjab Local Government Commission and take action against the local government based on the findings of the inquiry.
Published in The Express Tribune, August 25th, 2015.