KARACHI, Aug 8: An amount of Rs259 million is being distributed among tehsil municipal administrations following the government's decision to accelerate the pace of development work in rural areas launched with an aim of bringing them at par with urban centres viz-a-viz civic facilities.

This fund is the residual amount of 2.5 per cent general sales tax (GST) left after protecting the share of each district government and town administration, grant of Rs0.6 million to each of the 1,095 union council administrations and Rs1.2 million each to the six newly-created TMAs, as well as Rs140 million to be provided to the Sindh Local Government Board for disbursement of employees' pension.

The formula approved for the distribution of the funds among TMAs provides for 50 per cent allocation on population basis, 40 per cent on backwardness and 10 per cent on tax collection.

This is for the first time that human development index (backwardness) principle has been taken into account at TMA level for facilitating and strengthening municipal services all over Sindh.

It is learnt that an amount of Rs1 billion is being transferred to local government on account of grant against octroi. Besides, a sum of Rs1.89 billion has been earmarked for the distribution among district and tehsil administrations for the development of district social sectors under the devolved social services programme.

The formula approved for the distribution has fixed 50 per cent on the population basis, 30 per cent on backwardness and 20 per cent on equal sharing.

According to a report prepared by the Sindh Finance Commission, the budgetary funds of Rs613.329 million for PHED would be transferred to town administrations for public health engineering.

In addition, an amount of Rs1.9 billion is also being earmarked for distribution among district governments and TMAs for improving education, health and public health services.

The provincial divisible pool consists federal tax assignment, straight transfers and provincial tax receipts. The priority expenditure, comprising pension, subsidy and debt servicing and priority programme, will be subtracted from the gross divisible pool to arrive at net divisible pool.

District governments' combined share in the net provincial divisible pool will be 55 per cent whereas the remaining amount will be retained for provincial government's general grant.