PESHAWAR, May 6: The Provincial Finance Commission (PFC) has recommended that the NWFP government should directly finance town councils in the province from the next financial year, officials said.

The commission, which met here on Thursday, suggested that the provincial government should directly release funds to the lower tiers of districts so as to end delay in disbursement of funds in the present setup.

Senior minister Sirajul Haq, who also holds finance portfolio, presided over the meeting. Minister for local government and rural development Sardar Mohammad Idrees told Dawn that in the light of the commission's recommendation the provincial government would start direct disbursement of funds to the town councils from July next.

He said that the provincial government linked the raise in the districts' share with the implementation of the next National Finance Commission award and the resolution of the net hydel profit issue.

The provincial government would increase the districts' share after resolving the NFC stalemate and the net hydel profit with Wapda, the minister said. At present, the district governments release funds to the town councils in the province, received under the head of octroi and district export tax.

The town councils had insisted that the commission and National Reconstruction Bureau (NRB) allow the provincial government to directly release funds to the town councils. The district nazims also supported the PFC's recommendation.

During the PFC meeting the district Nazims demanded increase in the funds released by the federal government under the head of octroi and district export taxes. District Nazim Kohat Malik Assad said that the districts also demanded increase in share received under the head of octroi and district export tax.

He pointed out that after abolishing octroi tax and imposition of the General Sales Tax (GST), the Nawaz Sharif's government fixed 2.5 per cent for the districts.

He said that the federal government had raised GST from 15 per cent to 18 per cent, while the districts were still being paid only a 2.5 per cent share. Sources said that differences persisted between the district and town council Nazims over the creation of town councils in certain districts of the province.

Some district nazims objected over the single-town or single-tehsil districts and asked the provincial government to abolish such entities in the districts.