PESHAWAR, Jan 9: The NWFP government's intended move to hand over the salary budget of the district government employees to the newly established district governments from next year is not likely to yield much financial benefits for the cash strapped district based administrative entities, according to well placed official sources.

Sources in the provincial secretariat told Dawn that the intended move, if materialised, would be in fulfilment of a condition under the World Bank's loan agreement with the provincial government.

NWFP transferred Rs 12.29 billion to district governments on account of salary in the 2002-03 financial year, and an amount of Rs 13.05 billion has been allocated for the 2003-04 financial year.

It is required to hand over the salary component to the respective district government from July next to qualify for the SAC-III assistance of the World Bank, according to an official document.

NWFP received $90m World Bank assistance for SAC-I in the 202-03 financial year and an equal amount is expected to be released to it in March next to support execution of SAC-II in the 2003-04 financial year.

The move would also pave the way for assigning single line expenditure budget to each of the 24 district governments - as the National Reconstruction Bureau (NRB) wants the provinces to do, to ensure fiscal and administrative decentralisation. However, the move is not likely to bring any real benefit for the district governments as, according to a district coordination officer, the authority to hire or fire employees is being transferred to the district governments.

"This is not possible because doing so may create problems for the provincial government," said a senior development planner of the province when asked to comment.

The planner said that if the district governments were authorised to make appointments or carry out retrenchment it might open a new front for the provincial government.

"People heading the district administrations are least dependable in this respect," said the officer, adding "it will provide them an opportunity to make appointments on political basis and victimise their political opponents in the name of retrenchment drive".

Province could no more afford to repeat a mistake which cost it heavily, maintained the source. The NWFP was reaping the bad effects of recruitment policies successive provincial governments followed between 1988 and 1998.

According to official data, the number of employees of the provincial government rose from 177,000 in the 1988-89 financial year to 282,000 in the 2000-01 financial year after successive elected governments made recruitments on political grounds.

Official sources said that if district governments were not given hire and fire powers then merely placement of the salary budget would not do any good to them.

"Powers to make appointments and vice versa would help district governments to properly utilise their funds and make best use of them by curtailing the size of their establishment," said a DCO, seeking anonymity. However, contesting the DCO's argument, the development planner of the province said that why should the district governments be provided funds more than their requirements.

"They would be provided funds against the total number of their filled posts and not the vacant posts," said the planner. The DCO said that if district governments were allowed to restructure their establishment by chopping off the number of employees found redundant the saving accrued, in this respect, under the salary component could best be utilised at other places.

Opposing the argument, development planner said that in view of the pressing expenditure requirements, particularly debt servicing, it was not possible for it to transfer salary funds to district governments even on the basis of number of sanctioned posts.

"They would only be provided funds against the number of filled posts for which data is also being compiled to know the exact number of employees each of the district governments have," said the officer.