LAHORE, Sept 19: Punjab finance minister Sardar Hasnain Bahadar Dreshak has said formula-based Provincial Finance Commission Award will be announced in three months.
Talking to reporters after inaugurating the capacity-building workshop for officers of finance departments of four provinces here on Monday, the minister said resources were being distributed among the district governments under an interim award given by the political government three years ago.
He said the recent National Finance Commission meeting had concluded without resolving the differences over the resource distribution formula. The provinces had, however, reiterated their resolve to resolve the differences at the next NFC meeting.
Inaugurating the workshop earlier, the minister said the provincial finance commission was responsible for the transfer of funds from the provincial to local governments and between their different tiers (district, tehsil and union). Its basic function was to ensure that these transfers were non-discretionary and formula-based so that the local governments not only got a fair share of funds, but retained their fiscal autonomy as well.
He said the finance commission had to decide about the division of total resources between the provincial and local governments, but also make grants in aid to the latter. The workshop had been organized to make the finance department and the PFC Secretariat officers aware of the basic issues in inter-government transfers and the factors needed to be taken into consideration for grant design.
The minister said devolution was totally a new phenomena in our country. He was skeptical about the success of the system when it was launched four years back, but his opinion had been completely changed now like many members of national and provincial assemblies who were contesting the district government elections. He said devolution had ensured better utilization of funds.
Decentralization Support Programme national director Sohail Humayun said the workshop had been organized for enhancing the technical capacity of the officers to build a local resource pool for contributing the PFC work. Ten participants had been selected from each province for training by local and international experts. Two staff members of each provincial finance department would be trained to write PFC reports of international standard. The training programme would also deal with research on topics related to inter-governmental transfers identified by the finance departments, and four best trainees would be selected for training abroad.
Speaking on implementation rules for fiscal decentralization, Georgia State University’s Prof Roy Behl said monitoring and evaluation of decentralization was not an easy task because one inter-governmental system did not fit both the urban and rural sectors. Fiscal decentralization required significant taxing powers of all three levels of local government besides imposition of hard budgetary constraint, he said.