Despite the passage of more than one and half year, Sindh Government has failed to constitute Provincial Finance Commission (PFC) which has the mandate to distribute funds between local government institutions and provincial government.
Sources said that it was clearly mentioned in People's Local Government Ordinance (PLGO) 2012 that PFC would be the authority to distribute resources between the Sindh government and local councils out of the proceeds of the Provincial Consolidated Fund into a Provincial Retained Amount and a Provincial Allocable Amount.
The chapter XII-A of PLGO 2012 states: On coming into force of this chapter, the Governor forthwith shall constitute a Provincial Finance Commission for Sindh hereinafter referred to as the Finance Commission.
The Finance Commission shall be headed by the Minister for Finance and shall comprise of such other members as may be prescribed.
The functions, duties and powers of the Finance Commission shall be to make recommendations to the Chief Minister for a formula for distribution of resources including distribution between the Government and the Local Councils out of the proceeds of the Provincial Consolidated Fund into a Provincial Retained Amount and a Provincial Allocable Amount, respectively.
Provided that in no case shall the Provincial Allocable Amount be so determined that it is less than the funds transferred to local councils in the financial year 2012-2002 and the establishment charges budgeted for the functions of the Local Council in the same year, excluding transfers in lieu of Octroi and District Taxes.
The making of grants in aid by Government to the local councils from the provincial retained amount and any other matter relating to finance for and of the local council referred to the finance commission by Chief Minister or Government or by a local council.
The recommendations shall be based on the principles of fiscal need, fiscal capacity, fiscal effort and performance. Before finalisation of the recommendations under sub-section (1) the Finance Commission shall hold consultations with the relevant departments of government, Local Councils and, in the discretion of the Finance Commission, with any other body or persons and this process may carry on during the currency of an Order made by the Chief Minister under sub-section (5) of this section.
As soon as may be after receiving the recommendations of the PFC, the Chief Minister shall by Order specify in accordance with the recommendations of the commission under clause (a) of sub-section (1), the Provincial Retained Amount and the Provincial allocable Amount, and in turn the shares inter se of the Local Councils and that share shall be paid directly to the Local Council concerned promptly in accordance with the laid down procedure." The sources further said that from the day one of promulgation of PLGO 2012, the government of Sindh providing funds to local councils through Finance department.
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