Sindh forms much-awaited provincial finance commission

KARACHI: With the completion of the system of local governments in the province with elected representatives of people taking charge of the municipal organisations, the Sindh government, after a gap of eight years, has reconstituted the the much-awaited Provincial Finance Commission (PFC) for distribution of provincial fiscal resources among the district administrations of the province.

The provincial Finance Commission will be headed by provincial minister of finance being the chairman of the commission. In the case of Sindh, its Chief Minister Syed Murad Ali Shah will head the commission enjoying the additional portfolio of Finance Department.

Local government minister of the province will be co-chairperson the commission. Other members of the Finance commission include MPA Makhdoom Rafiq-uz-Zaman (being the lawmaker nominated by the leader of the house in the Sindh Assembly), MPA Faisal Ali Sabzwari, Sindh secretary for Finance Department, secretary for Sindh Local Govt Department, secretary of Sindh Planning and Development Department, mayor of Karachi Metropolitan Corporation, Arsalan Shaikh being the mayor of Municipal Corporation of Sukkur, Panah Odho, chairman of District Council of Jacobabad, and Khalid Soomro, chairman of municipal committee of Jacobabad.

Iqbal Hussain Shah (ex-director of Sindh Local Govt Board) and Ashraf Wasti will also be members of the commission from the private sector. Terms of reference of the commission include determining obligatory and priority expenditure of local bodies and formulation of divisible pool for distribution of resources. It will also prepare benchmarks of revenues and expenditures and revenue and expenditure projections for the local governments so that they are consistent with their respective mandates as envisaged by the Sindh Local Government Act 2013 and their powers to levy and collect taxes.

The commission will propose criteria and formula for vertical distribution of resources between the provincial and local government i.e. determination of provincial retained and allocable amounts. It will adopt fiscal distribution criteria/formula and mechanism for the horizontal distribution between local councils of allocable amount.

It will also suggest parameters for achieving fiscal discipline to maintain appropriate fiscal balance at the provincial and local councils. The commission will furnish its recommendation to the Sindh CM for consideration and approval.

The constitution of the Sindh Finance Commission, for whose notification was issued by Sindh chief secretary on Thursday, came a just a day after the Sindh CM met the newly-freed Mayor of Karachi Waseem Akhtar. The Opposition Muttahida Qaumi Movement and other opposition political parties in the province have long been demanding reconstitution of the PFC in the province.

In the previous months, Sindh Finance Department had frozen all accounts of local governments in the province for redoing the entire process of allocation of financial resources among local councils with new councils being carved out from the jurisdictions of older ones.