KARACHI: City govt’s development work comes to a halt: Paucity of funds
By Azizullah Sharif
KARACHI, May 13: All development activities by the city government and all the 18 town municipal administrations (TMAs) have almost come to a halt owing to short payment made by the federal government under the head of ‘matching grant’ and the transfer of funds by the Sindh government under the head of property tax.
The matching grant is provided to the city district government by the federal government in lieu of octroi which was abolished in July 1998 but due to the continuous short payments, a huge amount of Rs2,161.929 million has become outstanding against the federal government.
To further add to the financial difficulties of the town administrations, the provincial finance department has, so far, released only Rs100 million, as against Rs950 million, for the current fiscal year under this head.
Even during 2001-2002, the CDGK had received about Rs400 million less amount under the head of Property Tax and as a result uplift plans of the TMAs had suffered last year as well.
Well-placed sources in the CDGK said that since the property and entertainment tax, following disbursement by the provincial government, was distributed among all the 18 town municipal administrations, the provincial government’s decision of withholding the amount on the plea of its being deducted at source to adjust the KESC dues against local government institutions, amounted to depriving TMAs of their development funds.
The provincial government’s finance department has frequently been deducting at source a huge amount from the TMAs share from property and entertainment tax despite the fact that the KESC has been charging commercial rates from the TMAs, knowing that bulk of electricity was being consumed for lighting up streets which is simply a service and not a commercial venture, the sources said. It is illogical to deduct the TMA funds at source without giving any reason or an opportunity to reconcile the matter with the KESC, they added.
The city Nazim, Naimatullah Khan, had recently raised this issue at a meeting held under the chairmanship of Governor Ishratul Ibad and the latter directed the finance and local government departments to help resolve the issue immediately, the sources revealed.
“In fact, the Nazim has serious objections over the KESC’s ‘uncalled for’ and ‘unjust’ practice of charging commercial rates from the local government institutions as they are public service-oriented organizations and not the commercial concerns,” they said adding that he was well prepared to contest the issue and hence there was no justification to deduct the property tax at source.
NTR: The CDGK has also not yet received its share from Non-Tax Receipts (NTRs) although the provincial finance commission had recommended in June 2002 that “Provincial Non-Tax receipts would not form part of the provincial divisible pool. The non-tax receipts from education, health and works would be distributed between provinces and district governments on the basis of collection,” the sources said. They pointed out that Rs2,558 million had been collected on account of NTR by Sindh government out of which about Rs795 million were collected under health, education and works till April 2003, and were due to be transferred to the district governments.
The sources in the CDGK urged the government to immediately release the city government’s share from the provincial development divisible pool so as to enable it overcome its financial problems.
