Government's efforts towards consolidating fiscal decentralisation will focus on strengthening the provincial finance commission, developing MIS to monitor releases to the local governments, revision of delegation of financial power rules, beefing up the procurement and contracting systems and strengthening internal control systems within line departments.
According to sources in the Ministry of Finance, the successful implementation of devolution was dependent to a large extent on the capacity of local government institutions and the quality of officials working in the local governments. Budgeting, planning, monitoring, financial management, accounting and auditing are some of the key areas where capacity-building efforts would continue in the future.
Due to shifting of executive functions from the province to the district and tehsil, the provincial departments will have to redefine their roles to enable local government institutions to play their due role.
According to the sources, governance reforms and devolution of power to the grassroots level were initiated to alleviate poverty through elected and accountable local governments by strengthening the political, administrative and financial structures at the local level.
Devolution and the strategy adopted for implementation has been effective as the service delivery indicators for the first term of local governments have shown positive trends, whereas the social sector indicators were declining or stagnant in the pre-devolution period. The devolution process requires concerted efforts and intelligent use of available resources to reap the benefits of new governance paradigm in the country.
The federal and provincial governments are pursuing medium and long-term strategies to consolidate devolution and governance reforms. The sources said the delivery of basic social services like education and health was a central theme of poverty reduction. Expanding inclusive service delivery was critical to achieving the millennium development goals and maximising the gains from the upcoming demographic dividend.
The main responsibility of improving delivery of social services like education and health now lies with the provincial and district governments. Government's effort in the next 3-5 years will focus on better aligning accountabilities, expenditures, resources, administrative and policy functions across the different tiers of governance, in order to improve social service delivery.
The increased spending on the education sector during the last five years combined with better service delivery at the grassroots level, as a result of devolution, has resulted in improved outcomes in the education sector.
Future governance reforms in the education sector will focus on transparent criteria for teachers recruitment, decentralising the schools management committees (SMCs) or parents teacher associations (PTAs) and reaffirmation of their role in school management and in monitoring and curbing teachers' absenteeism. In the health sector, the medium-term strategy of the government aims at raising public sector health expenditures through focus on preventive programmes.
This approach provides a clear shift from curative to preventive health care especially for disadvantaged and weaker sections of society, living in the rural areas. It aims at promoting gender equity through targeted interventions like deployment of lady health workers (LHWs) and improvements in maternal and pre-natal health care.
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