Daily Times

KARACHI: Sindh government has not yet set up Provincial Finance Commission with authority to distribute resources between departments and Local governments, reducing the role of finance department, Daily Times has learnt.

Under Sindh Peoples Local Government Act, Governor Sindh has to constitute the Finance Commission. As per Chapter XII-A of SPLGO, on coming into force of this chapter, Governor forthwith shall constitute a Provincial Finance Commission for Sindh hereinafter referred to as the Finance Commission.

“The Finance Commission shall be headed by the Minister for Finance and shall comprise of such other members as may be prescribed. ” The functions, duties and powers of the Commission shall be to make recommendations to the Chief Minister for a formula for distribution of resources including distribution between the Government and Local Councils out of proceeds of the Provincial Consolidated Fund into a Provincial Retained Amount and a Provincial Allocable Amount respectively.

“Provided that in no case shall the Provincial Allocable Amount be so determined that it is less than the funds transferred to local councils in the financial year 2012-2002 and the establishment charges budgeted for the functions of the Local Council in the same year, excluding transfers in lieu of Octroi and District Taxes.

“Provided further that all the monies received by the Government in lieu of Octroi and District Taxes shall be added to the Provincial Allocable Amount separately. “Distribution of Provincial Allocable Amount amongst the District Council, Taluka and Town Municipal Administration and Union Administration as shares.

“The making of grants in aid by Government to Local Councils from the Provincial Retained Amount and any other matter relating to finance for and of the Local Council referred to the Finance Commission by the Chief Minister or Government or by a Local Council.

“The recommendations shall be based on the principles of fiscal need, fiscal capacity, fiscal effort and performance. Before finalization of recommendations under Sub-Section (1) Finance Commission shall hold consultations with relevant departments of government, Local Councils and, in discretion of Finance Commission, with any other body or persons and this process may carry on during currency of an Order made by CM under Sub-Section (5) of this section.

“PFC shall forward provisional recommendations prepared under Sub-Section (1) to the cabinet, which shall provide its views within two weeks failing which the Finance Commission shall make its recommendations to the Chief Minister. PFC may review recommendations on receiving views of Cabinet if any, and on finalization of its recommendations shall forward them to the Chief Minister.

“As soon as may be after receiving recommendations of PFC, Chief Minister shall by order specify in accordance with recommendations of the commission under clause (a) of Sub-Section (1), Provincial Retained Amount and Provincial Allocable Amount, and in turn shares inter se of Local Councils and that share shall be paid directly to the Local Council concerned promptly in accordance with laid down procedure.

“Chief Minister may, by order, also make grants in aid of revenues of Local Council in need of assistance and such grants shall be an additional charged expenditure upon Provincial Consolidated Fund after deduction of Provincial Allocable Amount.

“Certain Institutional process of Finance Commission: (1) In every financial year, at least three months before finalization of Provincial Budget, Finance Commission shall require Finance Department to submit a statement of estimated revenues and expenditures of Government for following financial year and shall also require a statement of Provincial Allocable Amount and its distribution prepared in light of the order under section 120-D(6). “Finance Department shall provide PFC with a statement of provincial allocable amount and its distribution, prepared in accordance with order under section 120-D(6), on approval of provincial budget. “PFC may cause any information required for making assessments and decisions on fiscal transfers to be placed before it from any organization or office of the Government, or Local Council. It would take all decisions by a majority of members present and voting.”