LAHORE, Sept 16: Central bank governor Dr Ishrat Husain has suggested unification of the provincial tax and revenue collection agencies as part of broader institutional reforms.

Speaking at the Punjab Development Forum here on Tuesday, he said the Punjab government should focus during the next four years or so on strengthening key economic institutions. These changes ought to be fundamental and not cosmetic, and they would require strong political will, he said.

“The division between the Board of Revenue and the excise and taxation department in collection of taxes and revenue should give way to a single Provincial Revenue Authority organized on the basis of modern organizational principles to eliminate multiple taxation, simplification of tax policy and procedures, reliance on self-assessment, enforcement of audit on a selective basis and an efficient dispute-resolution mechanism.

“In the planning and development department, a change in the mandate ... is badly needed as it has outlived its utility and is not equipped to face the present and future challenges of development. There is a need to make a shift from too much preoccupation with approval of schemes to a more holistic approach that ranges from assessment of needs to policy formulation and project preparation to monitoring implementation and evaluating policies, programmes and projects.”

He said the planning and development department would have to replace the traditional way of preparing five-year plans with a rolling public sector development programme and a medium-term public expenditure framework on which to anchor the annual budgets. “The coordination of all economic policies with the federal government, various parts of the provincial government and all the local governments has to be ensured by the planning and development department under the guidance of a Development Coordination Committee of the provincial government.”

He said district governments should be given full administrative and financial powers to manage primary, secondary and college education along with basic health units and tehsil and district hospitals. He also stressed the need for depoliticizing health and education institutions.

The fourth ingredient, he said, had to do with the organization of agriculture education, research, extension and dissemination of new knowledge and techniques among the farmers.

Dr Hussain said, the government should look at many of its enterprises, corporations, boards, businesses and see if some of them could be sold to the private sector, wind up those which were no longer required and merge or scale down others. This would free up a lot of financial and managerial resources for other purposes.

He also asked the government to review the terms of reference of each department and separate policy, regulatory and operational responsibilities. “Policy formulation, budgeting and monitoring should continue to be vested in the departments while regulatory functions should be transferred to independent regulatory bodies and implementation to autonomous bodies, corporate entities or other structures endowed with adequate powers. The current system of overloading the departmental secretaries with overlapping functions induces a culture of indecision and lack of ownership.”