March 29, 2002	Friday	Muharram 14, 1423

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ISLAMABAD, March 28: The provincial finance commission would devise a transparent and equitable formula for fiscal transfers to the local governments, National Reconstruction Bureau Chairman Lt-Gen (retd) Tanvir Naqvi said here on Thursday.

Speaking at the inaugural session of a two-day workshop on “fiscal transfer mechanism for local governments”, he said fiscal devolution was at the heart of the devolution plan.

Representatives of the federal and provincial governments are attending the workshop.

The NRB chairman said fiscal transfers based on a transparent and equitable formula would improve governance and reduce graft and corruption.

The fiscal transfer formula would need to incorporate parameters for fiscal needs, fiscal capacity, fiscal effort and performance to ensure effective allocation of funds, he added.

Stressing the need for continuous training, he suggested that capacity issues should not hamper the new fiscal transfer mechanism as those always posed a problem.

However, he said, the development of the formula was the job of the provincial finance commission — a body of professionals requiring very little training.

Emphasizing the need for introducing the new fiscal system at the earliest to ensure that the devolution of power plan benefited the people, the NRB chief asked the officials to ensure the desired changes aimed at the progress of the country and welfare of the masses.

Mr Naqvi informed the participants that the NRB had received a grant of $500,000 from Britain’s DFID specifically for training related to fiscal decentralization. A training plan had already been circulated to the provincial governments, he added.