Preparations are underway to finalize the budget estimates in different tiers of government and their constituent bodies. It is interesting to note that budget-making exercises usually infuse a fresh hope that the next financial year shall be better than the outgoing one. This assumption proves slightly short of wishful thinking.

While there are hardly any drastic changes that can be interpolated in budget preparation exercises, the lower tiers of government have to invariably adjust their spending volumes according to some of the allocations made for them at the top.

The City District Government Karachi (CDGK) has already distributed its budget document on 27 April 2004 in close follow-up of its new budgetary laws. However, experts are of the view that CDGK will have to substantially adjust its development spending which is proposed to be an ambitious Rs15.59 billion.

The flow of funds from the provincial and federal government shall play a very vital role in determining the accuracy of the estimates, It is also vital to note that budgetary provisions and programme execution for local bodies such as CDGK and its affiliates do not necessarily match with one another.

It will be useful if the key issues related to budget and overall working of the local government system are reviewed and analysed to attempt streamline the prospects in the future.

Under the framework of devolution plan, which was legally implanted through Sindh Local Government Ordinance 2001, it was hoped that some of the most essential services shall be dealt by the Union Council at the grass root level.

A total allocation of Rs0.623 billion was kept for development works in the 178 union councils of Karachi in the previous year. It was found that a sizable number of union councils did not even have adequate funds to timely pay their workers and staff members.

In August 2003, staff of Landhi Town launched a protest for non-payment of salaries pending for over two months. Besides, the issue of honorarium to the local elected representatives remained a contentious issue throughout the previous year Proposals made by the provincial government were found to be ridiculously low, not even matchable to the salary of a sanitary worker! With this disgruntled staff cadres, the union councils were not able to create any impact in their respective areas.

Despite the tall claims made by the propounders of the present local government system, the raising of revenue and the disbursement of funds emerged as an unresolved lacunae in the various tiers of the government.

Both in development and establishment related expenditures, the control of the provincial government remained intact. About one fourth of the total revenue in the previous Rs27 billion budget was derived from government grants.

Traditional sources of revenue for local governments were hardly able to scale upto the list of expenditures. After the merging of Karachi Development Authority and other development authorities, the CDGK has to finance the entire outlay of development projects.

Obviously the available funds are far less than the requirements. The tutelage of federal and provincial governments was not reduced. The CDGK has re-asserted its resolve to focus on new development works as apparent in the highlights of the draft budget.

Important new works included the proposed establishment of diagnostic centres, a cardiac health care facility, agro-industrial estate and initiation of development work through citizen community boards. The wisdom of launching so many new development projects is questionable since various similar attempts in the past were not examined in the present announcement.

In the previous budget, construction of bus terminals. water loss reduction projects and literacy centres were earmarked. Update on these projects is vet to be seen. The City Nazim has expressed his intention to continue the 'Tameer-e-Karachi Programme'.

However since the success of the programme is very much dependent upon the allocation and release of funds from federal and provincial governments, it will be difficult to predict the performance ahead of time.

It is often misconstrued that by showing fat figures in the budget overlays, the financial capacity of institutions can be enhanced. Budget preparation and apportionment of funds are only a routine exercise which derive heavily from the previously established financial procedures and limitations, evolving out from the governance mechanisms.

The financial potency normally flows from the self capacity to fund the array of expenditures, independence to formulate priorities of spending related to corresponding programmes/plans/projects and the unstinted control on the working finances.

The experiences have visibly shown that local government institutions are tightly gripped in the financial web work of the working norms of the Government of Sindh (GoS).

Where as the SLGO 2001 clearly lays down the details to this effect in its Sections 107-120, sufficient room has been detected at various stages of the routine functioning of GoS.

Delayed releases of taxes collected by the provincial bureaucracy; unjust release of funds within the local government (from city to town or union councils); paltry resource disbursement for carrying out routine works and a low salary/allowance structure for representatives are a commonly prevailing set of problems in this sphere of affairs.

The devolution concept also envisaged an effective local government initiative to identify the community related areas where input was needed. Consequently the mobilization of the input was also a part and parcel of this assumed arrangement.

This focused on sectoral performance predominantly in health, education and social welfare. Sizable funds were allocated for health in 2003-04 (Rs1,792,52 million) while the present draft budget of 2004-05 proposes Rs2,550 million showing an increase of 42.258 per cent.

Similarly in education, the 2003-04 budget allocated Rs5170 million, showing an increase by 14 per cent from the previous figure.While these figures appear to be impressive, a sizable portion of these amounts are simply spent in sustaining the spread out establishment cost of the weak institutions already in place.

There is hardly any possibility of improving the quality of service received from these outfits. Hospitals, maternity homes, basic health care centres. dispensaries, medical colleges, primary and secondary schools managed and run by CDGK require much more than a small rise in the yearly spending.

Scores of studies and researches have shown that the services extended by these institutions are marred by several management and administrative problems apart from scarcity of finances.

Poor quality of human resource, absenteeism, over-staffing/inappropriate postings, lack of training, political manoeuvrings in day to day management and absence of effective monitoring are a few commonly observed short comings.

For instance, a study report in September 2003 identified that two out of the three degree colleges in Lyari had only skeleton teaching staff. Performance of many schools in the same town were affected by ghost teachers resulting in serial embezzlement of precious public funds.

It is usually believed that by allocating budget heads and funds for any specific section of urban management, the situation would improve on its own. Some of the key areas of urban management include solid waste management, sewerage/drainage.

It is a common observation that each of these areas show absolutely dismal performance despite the claims of increase in spending. An amount of Rs5.016 billion was allocated for water and sanitation in -1003-04.

However the city is currently experiencing one of the worst water supply service for its residents. Previously the scarcity of water was cited as the handicap. This year, due to torrential rains of July August 2003, the Hub river source is sizably filled up.

However due to poor distribution, no city area can claim to receive any satisfactory water supply service.The sewerage now flows mainly through open creeks. storm drains or nullahs falling into the sea untreated.

Rise in the monetary allocations has not improved the situation to any end. Similarly, a sizable chunk of establishment head is allocated for the salaries of sanitary workers. Cleanliness status of the city is any thing less than a huge garbage dump. The tendency is to develop new infrastructure without improving on the existing components.

The City government and its affiliates, which are short of funds for development, resorted to damaging ways of generating bucks! Commercialization of major roads of the city, regularization of various type of shoddy construction and cancerously expanding outdoor signages and hoarding are a few to mention.

While the net financial benefit to the kitty of the city is yet to be seen. the damage caused to the built environment is beyond repair. At one point, the City Nazim discussed the possibility of imposing a city levy on all the imports to raise funds but the proposal was given a cold shoulder by the federal government.

Besides the city government has been repeatedly falling short in its duty of reviving urban planning process for the city. What is usually done is allocating a few million rupees to meet the establishment cost of skeleton staff while the actual assignment is entirely neglected.

It is amusing to note that the total development outlay controlled by the federal and provincial governments and their autonomous institutions is far more than the overall budget of the city government.

This clearly unveils the reality behind the theory and practice of devolution and the sincerity of the upper tiers to meaningfully enforce it. In the carefully crafted 'Karachi Package' announced by the President during the previous year, initiatives in almost all the sectors were launched with CDGK having no control on the planning, execution or fund all allocation/disbursement of the projects.

The glowing examples include the projects undertaken by National Highway Authority (NHA) which is controlling assignments worth over Rs. 10 billion. Since a great deal of funds flow from the upper tiers, city government has to bear the brunt to no end!

It is adequately clear that the devolution plan is facing a grave crisis. Political and financial subjugation has rendered local institutions subordinate to the province and the federal government. For projecting development, the race is really tough. Each tier of government intends to cash on the mega projects and other development spending.

Obviously the federal government emerges as successful at least in holding control of major chunk of funds. Ugly political scuffle between the local and provincial government is harming the entire development scene and the reputation of the parties concerned.

Amidst these factors, the premise of budget making may be used to re-visit the concept and application of devolution plan. Unless the voluntary and institutionalized delegation of funds and power comes from the top to bottom tiers, it will go down in the history as yet another unsuccessful experiment in governance!