July 24, 2006	Monday	Jumadi-ul-Sani 27, 1427

NOTWITHSTANDING the accusations that no ruler in Pakistan is really interested in shedding centralized authority, the National Reconstruction Bureau (NRB) has finalised proposals to transfer those functions to the provinces which can be performed by their governments.

The deovolution proposals will be considered by the “competent fora” with a view to take a final decision shortly. After their approval, NRB is expected to play a lead role in ensuring the much-talked about decentralisation from the centre to provinces and then to local governments.

All the constitutional, legal and administrative issues relating to the transfers of subjects from the federal to the provincial governments have been analysed by the NRB.

The NRB believes that the efficient working of provincial finance commissions, local governments, offices of the zila mohtasibs, zila mushawarat committees, accounts committees and monitoring committees is an important pre-requisite for strengthening the decentralisation process.

In order to make the working of these institutions/committees effective, rules/regulations and bye-laws are required. Some of these have already been developed. Model rules are being developed by the NRB to be promulgated/notified by provincial governments, once the approval is accorded by President General Pervez Musharraf.

A number of guidelines issued by the NRB in the past are expected to be converted into model rules. The effective performance of the monitoring committees will ensure improvement in service delivery at the local level.

The NRB has also developed the ‘model’ to improve the relationship between financial institutions and the poor. It believes that the objective of the good governance can best be achieved by introducing pro-poor policies. In this context, NRB officials maintain that it is desirable to focus on the process through which the poor in the society have access to the “economy’s savings” and to use credit to initiate small business ventures.

The new model is designed to enable at least 18 million people to have access to the credit from the financial institutions in the rural areas. NRB is the focal organisation for this initiative and will refine the model in collaboration with the stakeholders including the State Bank of Pakistan, NADRA and administrative ministries/divisions for approval from the higher authorities.

As part of the new local government finance system installed in July, 2002, local governments have been empowered to levy and collect taxes. The most important tax entrusted to the tehsil municipal administration (TMA) is the property tax. Local governments require technical support in the form of manuals as well as improved procedures to effectively utilise their taxation powers and increase their own resources.

In this behalf, NRB will provide support to the provincial governments in the development of taxation manuals and also enhancing the ability of local governments, particularly TMAs to collect their revenue.

To make TMAs fully functional and appropriately perform assigned functions, new manuals relating to licensing, water supply, sewerage and waste disposal, spatial planning etc., are being developed by the NRB in collaboration with development partners, particularly the World Bank through the Water and Sanitation Programme (WSP).

NRB estimates that within two years, capacity of TMAs will be enhanced through new manuals and training of relevant tehsil/ town offices and employees.

A new system of local government finance was installed as an integral part of devolution. Provincial finance commissions have been established and are responsible for determining the share of the provincial governments and local government in the Provincial Consolidated Fund. The local governments are responsible for budgeting. Local councils approve budgets and through accounts committees monitor the use of resources. The Auditor General (AG) is responsible to audit the expenditure of local government.

However, NRB believes that the new system must be understood by functionaries and the elected representatives. Budget rules, fiscal transfer rules, and accounts code have been notified. Other rules are being framed. A gigantic task of capacity-building of functionaries and the elected representatives is to be completed.

NRB will continue to support various decentralisation support programme initiated by the development partners to strengthen fiscal decentralisation process. The bureau calculates that the entire effort will take three to four years to fully implement the local government finance system.

The decentralization process, NRB informed the higher authorities, requires concerted effort and intelligent use of available resources to reap the benefits of new governance paradigm. The federal and provincial governments are pursuing medium and long-term strategies to consolidate devolution and governance reforms, which many government’s critics believe would not take off.

A concerned official concedes that despite a lot of funding and technical support by the donor agencies, the process of decentralization has not picked up and that the issue requires commitment at the highest levels.