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PESHAWAR: The Khyber Pakhtunkhwa government has arbitrarily withheld more than Rs14 billion development funds allocated to the local bodies for the current fiscal, bringing development activities in most districts of the province to standstill, according to sources.

The third quarter of the current financial year ended on March 31, however, the provincial government has so far released only Rs6.6 billion to the local bodies all over the province.

The released amount is about 23 per cent of the Rs28 billion development funds, allocated to the local bodies in the Annual Development Programme 2017-18.

Officials told Dawn that under the Provincial Finance Commission (PFC) award, finance department should disbursed about Rs21 billion to the three tiers of the local bodies out of total allocation at the end of third quarter of the fiscal.

They said that not only provincial government arbitrarily withheld the local bodies’ funds, but also violated the PFC award and local government law by releasing the amount to districts subject to condition of 60 per cent utilisation of the previously released funds.

Development activities in most of districts at standstill

The documents available with Dawn show that village and neighbourhood councils in only five districts managed to receive their due share of two quarters, amounting to Rs1.72 billion. “The village and neighbourhood councils in the remaining 21 districts have not received a single penny,” officials said.

The details show that only 13 district governments got development funds worth Rs2.15 billion while half of the province was left without any development funds during the current fiscal.

In addition to this, 57 tehsil municipal administrations (TMAs) out of the total 77 were issued Rs2.75 billion development funds during the year.

Under the Khyber Pakhtunkhwa Local Government Act, 2013, the provincial government is bound to give 30 per cent funds allocated in the ADP to the local governments.

The ADP for the current fiscal year is Rs208 billion. The development outlay envisages provincial component of Rs126 billion and Rs83 billion foreign component.

“Keeping in view the 30 per cent formula under the law, the local governments have Rs37.8 billion share in the budget,” a senior official told Dawn. However, he said that provincial government reflected only Rs28 billion as share of the local bodies.

Mardan district nazim Himayatullah Mayar told Dawn that withholding of funds adversely affected developmental activities of the local bodies.

“The district governments have passed their budgets in June and July but the delay in release of funds has put them in dilemma,” he said. He added that development schemes were time and again changed owing to lack of funds.

Mr Mayar said that Mardan district government passed budget in June 2017 but provincial government released the funds in February 2018. “With the delay of eight months, utilisation of funds would take another few months as the administrative approval, tendering and submission of work order is another time consuming process which takes months,” he added.

Regarding provincial government decision to release funds after the 60 per cent utilisation of the previous amount, he said that it was violation of the local bodies’ law and Constitution.

Mr Mayar said that law was clear about the district governments’ share in the ADP that was 30 per cent.

“How the provincial government decides in violation of law,” he questioned.

Provincial Minister for Finance Muzafar Said told Dawn that provincial government should release funds to the local bodies at the end of each quarter. He said that there was also rationale in the provincial government’s decision to link funds release with the utilisation of previous amount.

Since the installation of the local bodies in 2015, the provincial government has been placing cut on the devolved development funds each year.

In the first year after establishment of local bodies, the provincial government slashed Rs27 billion from their share in funds as they were released only Rs15 billion against Rs 42 billion.

Similarly, in 2016-17, the provincial government released only Rs27 billion to the local bodies against their share of Rs33 billion, sources said.

Published in Dawn, April 2nd, 2018