KARACHI: The Sindh government has chalked out a new formula for sharing of funds among the recently revived Karachi Metropolitan Corporation, the municipal corporations of three other divisions and district councils under the local bodies system of 1979, officials said on Tuesday.
“For funds sharing, a new formula has been prepared containing some elements of the historical formula [share of the districts prior to 1998-9 when Octroi and Zila Tax were abolished] and some elements of the provincial finance commission of the Sindh Local Government Ordinance 2001,” said Sindh Local Government Secretary Ali Ahmed Lund.
Thus, he added, a ‘mixture’ of both formulas had been chalked out to meet financial needs of the districts. The existing formula could not cater to the salary burden that had increased owing to recent recruitments and creation of ‘some new institutions’, he believed.
“However,” the secretary noted, “salaries of all existing employees have been protected under the new formula.”
A source in the Sindh finance department told Dawn that under the existing formula, 23 districts of Sindh received between Rs35 billion and Rs36 billion a month. The official said the total financial share of the districts during 1998-9 had been Rs27 billion when both Octroi and Zila Tax were abolished by the then government of prime minister Nawaz Sharif.
So far, the local government had not conveyed to the finance department any new formula of funds share among the districts, the official said.
He said the percentage of funds share would be determined after assessing it as a number of union councils had been drastically reduced under the 1979 local bodies system.
“One major flaw in the 1979 local bodies system was that it did not contain financial arrangement,” the official said.
He was of the opinion that in the Sindh Local Government Ordinance, 2001, a good point was that it enshrined the provincial finance commission on the pattern of the National Finance Commission that was supposed to determine funds share for the districts under an ‘agreed formula’.
The official said it was not easy to go back to the 1998-9 fund sharing method when both octroi and zila tax had been abolished.
The finance department official said that Nazims shared the blame for poor financial position of the districts, as they gave jobs to people in ‘massive numbers’ without ensuring proper collection of taxes and financial management.
Local bodies structure In response to a question, the local government secretary told Dawn that under the revived 1979 local bodies system, there would be the Karachi Metropolitan Corporation, five district municipal councils and one district council in Karachi.
Besides, the official said there would be eight union councils in Karachi as these councils existed under the 1979 law and the same were described as ‘octroi earning councils’.
Similarly, Mr Ahmed said, there would be Hyderabad Municipal Corporation, Sukkur Municipal Corporation and Larkana Municipal Corporation.
He said by the time the 1979 local bodies system had been replaced by the Sindh Local Government Ordinance 2001, the three cities had assumed the status of corporations.
The secretary said the local government system of 2001 did not fulfil its stated promise of bringing development in both urban and rural areas simultaneously.
He said the Rs3 billion share of the district council of Karachi, which was meant for uplift of slum areas, was given to the defunct city district government of Karachi under the local government system of 2001. Residents of urban slums complained that no significant development had taken place in their areas, he added.