PESHAWAR: Khyber Pakhtunkhwa government is rolling back its much touted local government system by wresting financial powers from the district governments even before completion of two years of the LG system, according to officials.

In its April 11 and May 12 sittings of the ongoing session, the provincial legislature amended the relevant law to allow the government to encroach upon the powers of Provincial Finance Commission (PFC) and wrest control of communication and works and public health engineering departments from the districts.

Officials familiar with the evolution of PFC over the years consider these changes as prelude to gradual rollback of the entire system.

Amendment to Section 53 of the Local Government Act, 2013 dealing with the functions of PFC inserted a proviso after clause ‘a’, saying that government may allocate certain amount from the 30 per cent grant to public interest fund to be administered by government and to be used by public functionaries for the development of the local government.

Official terms amendments to relevant law rollback of entire system

Another amendment in clause ‘b’ also allowed provincial government greater role in determination of formula for the distribution of the grant, which was previously sole prerogative of PFC.

“It was the biggest achievement of PTI government to earmark 30 per cent of the ADP for the grassroots level,” an official said. He added that it was the best example of fiscal decentralisation.

He said that allocating certain portion of the amount to a public interest fund was mala fide and government was vaguely saying that it was not ready to give 30 per cent to local government.

“Who is the public functionary? Who is going to have a say in the public interest fund? It is clear that chief minister and his cabinet members are the beneficiaries,” said the official. He added that it was against the spirit of equity as the money would be dished out according to whims of politicians instead of a formula.

The official said that by doing so, the PTI government was providing their successors with an opportunity to not give money to local governments.

He said that Local Government Order (LGO), 2001 provided for PFC and initially Rs 800 million was allocated to all districts. The MMA government earmarked 10 per cent of that amount for the chief minister and five per cent for the finance minister. The ANP government also continued this practice.

Back in 2008, PFC share was increased to Rs1.6 billion. The money was distributed among all the districts on the basis of PFC formula, which was determined on the basis of three indictors of poverty, population and lack of infrastructure.

The official said that one of electoral promises of PTI was to empower LGs. “At the outset of initial local government debate, the proposal was to give the district 50 per cent of the ADP. It was finally settled at 30 per cent,” he said, adding that it was a revolutionary step.

The ADP figures of the districts for past two years, shared with Dawn, also show that provincial government in the first year released only half of the districts’ share.

In 2015-16, Rs30.27 billion was earmarked for three tiers of all districts, however, only Rs15.13 billion was released to them. Likewise, Rs33.90 billion was allocated for district ADP during the current fiscal and so far about Rs21.61 billion has been released to local governments.

PFC in its October 20, 2016 meeting has proposed Rs29.10 billion districts ADP for the year 2017-18.

A local government official said that that the changes were a big blow to the local government system. “It is against the basics of decentralisation to wrest powers and finances from districts,” he said. He added that they were thinking of devolving more departments to districts when the province wrested control of two sectors all of a sudden.

“Execution of schemes is easier at district level as compared to micromanaging everything from Peshawar,” said the official.

Provincial Senior Minister Inayatullah Khan was not available for comments while telephone of government spokesperson Mushtaq Ahmed Ghani was found switched off despite promising that he would get back after talking to officials concerned.

Published in Dawn, May 22nd, 2017