July 7, 2001

INTRODUCTION

The Provincial Budget have been announced for the year 2001-2002. For the time Current and Development Budgets have been prepared for each district separately. These were prepared keeping the Local Government (Model) Ordinance 2001. The National Reconstruction Bureau provided guidance and assistance during the preparatory stages. Given that the budgets have been prepared for the first time it was decided to review the Budgets in light of the Ordinance and highlight issues which need further clarification. The report of the Sindh Budget has been prepared and circulated to all provinces. Based on the review exercise of Sindh it is felt that the Provinces will need some presentational changes in the Budget in order to make it compatible with the new Ordinance. These guidelines are expected to assist the Provinces in making the necessary changes. Under the Ordinance the Budget needs to clearly specify the Non-salary funds budgeted for each District / Tehsil / Town according to the First Schedule. The establishment costs have to be indicated in the Provincial level budget. A slightly different presentation of the Budget has to be provided so that the budgeted amounts and the functions are clearly demarcated. On the development budget side the schemes have to be classified in greater details so that each District/ Tehsil/Town is aware of the exact development funds available to them and the work being undertaken in their area. An overview of the different components of the Budget and their categorization is provided on the following page.

OVERVIEW OF BUDGET COMPONENTS UNDER SBNP LOCAL GOVERNMENT (MODEL) ORDINANCE 2001

1. Provincial Level Budget

1.1 Current Budget
1.1.1 Budget of Provincial Departments and Offices other than in First Schedule
1.1.2 Establishment Budget components
1.1.2.1 Staff of Provincial Department / Offices as in section 1.1.1 above
1.1.2.2 Provincial staff in District Government
1.1.2.3 Provincial staff in Tehsil / Town Municipal Administration
1.1.2.4 Provincial Staff in Union Administration

1.2 Development Budget
1.2.1 Schemes of Provincial Departments / Offices
1.2.2 Inter District schemes
1.2.3. Foreign Aided Projects/schemes which cannot be decentralized/entrusted
1.2.4 Other categories
2. District Government Budget

2.1 Current Budget
2.1.1 Non-Salary component of District Government Offices (Decentralized) in First Schedule which may be at the following level: District / Tehsil / Town / Union
2.2 Development Budget
2.2.1 Schemes of District Government Offices in the First Schedule
2.2.2 Inter Tehsil / Town schemes
2.2.3 Tehsil / Town Schemes but being implemented at District level
2.2.4 Other Categories

3. Tehsil / Town Administration Budget

3.1 Current Budget
3.1.1 Non-Salary component of Entrusted Departments in First Schedule Tehsil / Town / Union level

3.2 Development Budget
3.2.1 Schemes of Entrusted Offices in the First Schedule
3.2.2 Inter Union schemes
3.2.3 Union Schemes but being implemented at Tehsil / Town level
3.2.4 Other Category

4. Budget of local fund
4.1 District local fund
4.2 Tehsil / Town Administration local fund
4.3 Union Administration local fund

1. Provincial Level Budget

1.1 Current Budget (Provincial level)
1.1.1 Budget of Provincial Departments and Offices other than in First Schedule

The Provincial level Current Budget must be prepared only for department and offices other than those which are provided in First Schedule (Part A, B, C, D) of the Ordinance (attached as Annex-I). If the Provincial departments / offices have District, Tehsil / Town, Union level offices, these should also be included in the Provincial level Current Budget.

There would be no non-salary budget for the Decentralized / Entrusted Offices specified in the First Schedule in the Provincial level Current Budget.
1.1.2 Salary Component of the staff at following level
1.1.2.1 Staff of Provincial Department / Offices as in section 1.1.1 above
1.1.2.2 Provincial staff in District Government
1.1.2.3 Provincial staff in Tehsil / Town Municipal Administration
1.1.2.4 Provincial Staff in Union Administration

The Provincial level Current Budget should contain the salary of all the Provincial Staff. It should not include the staff being paid from the various Local Funds.

A summary of total Establishment cost must be provided separately for each District / Tehsil / Town / Union (attached as Annex II).
1.1.3 Grants (Code 70000) to District Government / Local Bodies / Others Provincial level Current Budget should show the total amount of OZT distributed to the Districts. Details must be provided by District / Tehsil / Union (attached as Annex III).
1.1.4 Statement of New Expenditures shown as “Block Allocation” need to be broken down by District (Annex IV). Transition Devolution Fund to be spent according to the approved Provincial Transition Report. Details to be provided by District.
1.1.5 General Current Budget documents are to be provided as before.

1.2 Development Budget (Provincial level) Schemes which relate to the Decentralized / Entrusted offices need to be carried out that level. If for some reasons they are to be maintained at the Provincial level then such schemes need to be clearly indicated in the Budget. The present schemes in the Budget need to be reclassified as per Annex V. The classification or presentation of the Development Budget at the provincial level will include the following categories of schemes.
1.2.1 Schemes of Provincial Departments / Offices The Development Budget must be prepared for Departments / Offices other than those which are specified in the First Schedule of the Ordinance. If these departments have schemes at District, Tehsil / Town, Union level, these should also be reflected here.
1.2.2 Inter District schemes Projects/schemes, which are across Districts will be budgeted at Provincial level.
1.2.3 Foreign funded District based schemes, which cannot be Decentralized /Entrusted These may include the following types: Schemes with Foreign Project Component
1.2.4 Other categories Schemes which do not fall under any of the categories mentioned above under section 1.2.1 to 1.2.3
1.2.5 Grants (Code 70000) to District Government / Local Bodies / Others Details of all Grants, Aid etc. provided to the districts need to be provided.
1.2.6 Block Allocations Expenditures shown as “Block Allocation” need to be broken down by District (see Annex IV).

2 District Government Budget

2.1 Current Budget
2.1.1 Non-Salary component of District Government Offices (Decentralized) in First Schedule which may be at the following level: District / Tehsil / Town / Union

The District Government Current Budget must be prepared only for offices which have been provided in First Schedule of the Ordinance. These offices must be grouped accordingly showing the respective EDOs and other relevant staff.

The District Government Current Budget should include only the Non-salary component of the budget of the District. If the Offices have Tehsil / Town / Union level offices, these should also be reflected in The District Government Current Budget.
2.1.2 All Grants to Tehsil/Town / Union to be provided in detail. The District Government Current Budget must include the total OZT Grant received from the Provincial Government and their distribution details to Tehsils (for Octroi) and Unions (for Zila Tax)

2.2 Development Budget. The classification or presentation of the Development Budget of the District Government will include the following categories of schemes (attached as Annex VI).
2.2.1 Schemes of District Government Offices The Budget must be prepared only for those Offices, which are specified in the First Schedule of the Ordinance. If these departments / offices have schemes at Tehsil / Town, Union level these should also be reflected here.
2.2.2 Inter Tehsil / Town schemes Projects/schemes, which are across Tehsils / Towns will be budgeted at District level.
2.2.3 Tehsil / Town Schemes which cannot be decentralized to Tehsil / Town level Schemes which are Tehsil / Town based but due to some Financial / Administrative / Technical / Procedural reasons cannot be implemented by the Tehsil / Town Administration, should be shown separately in the District Budget by Tehsil / Town.
2.2.4 Other Categories Schemes which do not fall in the above categories 2.3.1 to 2.3.3..
2.2.5 Grants to Tehsil/Town/Union / Others Details of all Development Grants, Aid etc. provided to the Tehsils / Towns / Unions need to be provided.

3. Tehsil / Town Administration Budget

3.1 Current Budget
3.1.1 Entrusted Departments in First Schedule The Tehsil / Town Current Budget must be prepared only for the Offices specified in the First Schedule of the Ordinance. The Tehsil / Town Current Budget should have only a Non-salary component. If the entrusted / offices have Union level offices, these should also be reflected in The Tehsil / Town Current Budget.
3.2 Development Budget The development schemes at the Tehsil/Town level will include the budget of the Entrusted Offices as indicated in the First Schedule.

4. Budget of local fund There is no major change in the format of the Local Fund budgets. These can be developed as before.

4.1 District local fund
(a) It must contain both the Recurring and Development Budget relating to the Local Fund.
(b) The Budget must be prepared only for those functions, which relate to the District Local Fund as specified in the Ordinance.
(c) The salary part of the budget should include salary of only the staff paid from the Local Fund.
(d) The Budget must provide a statement of Receipts and Expenditures.

4.2 Tehsil / Town Administration local fund
(a) It must contain both the Recurring and Development Budget relating to the Local Fund.
(b) The Budget must be prepared only for those functions, which relate to the Tehsil / Town Local Fund as specified in the Ordinance.
(c) The salary part of the budget should include salary of only the staff paid from the Local Fund.
(d) The Budget must provide a statement of Receipts and Expenditures.

4.3 Union Administration local fund
(a) It must contain both the Recurring and Development Budget relating to the Local Fund.
(b) The Budget must be prepared only for those functions, which relate to the Union Local Fund as specified in the Ordinance.
(c) The salary part of the budget should include salary of only the staff paid from the Local Fund.
(d) The Budget must provide a statement of Receipts and Expenditures

ANNEX – I

FIRST SCHEDULE

[See sections 14 and 35)]
Part-A

Decentralized Offices
(i) Civil Defence
(ii) Agriculture (Extension)
(iii) Livestock
(iv) On-Farm Water Management
(v) Soil Conservation
(vi) Soil Fertility
(vii) Fisheries
(viii) Forests
(ix) Wildlife
(x) Labour
(xi) Social Welfare
(xii) Sports and Culture
(xiii) Cooperatives
(xiv) Boys Schools
(xv) Girls Schools
(xvi) Technical Education
(xvii) Colleges, (other than professional)
(xviii) Sports
(xix) Special Education
(xx) Finance & Budget
(xxi) District Attorney
(xxii) Accounts
(xxiii) Basic & Rural Health
(xxiv) Child & Woman Health
(xxv) Population Welfare
(xxvi) Hospitals
(xxvii) Environment
(xxviii) Magistracy
(xxix) Land Revenue, Estate,
(xxx) Excise and Taxation
(xxxi) Housing Urban
(xxxii) Local Government & Rural Development
(xxxiii) District Roads and Buildings
(xxxiv) Transport.

Part-B

Other Offices

(i) Coordination
(ii) Human Resource Management
(iii) Community Organization
(iv) Registration Office
(v) Enterprise and Investment Promotion.
(vi) Legal advice
(vii) Legislation
(viii) Planning & Development
(ix) Public Health
(x) Information Technology Development
(xi) Information Technology Promotion
(xii) Database
(xiii) Literacy Campaigns
(xiv) Continuing Education
(xv) Vocational Education
(xvi) Energy

Part – C

Groups of Offices

(i) District Coordination: Coordination, Human Resource Management and Civil Defence.

(ii) Agriculture: Agriculture (Extension), Livestock, Farm Water Management, Soil Conservation, Soil Fertility, Fisheries, Forests and Wildlife.
(iii) Community Development: Community Organization, Labour, Social Welfare, Sports and Culture, Cooperatives, and Registration office.

(iv) Education: Boys Schools, Girls Schools, Technical Education, Colleges, (other than professional) Sports (Education) and Special Education.

(v) Finance and Planning: Finance & Budget, Planning & Development, Accounts, Enterprise and Investment Promotion.

(vi) Health: Public Health, Basic & Rural Health, Child & Woman Health, Population Welfare, District and Tehsil (Hqrs.) hospitals.

(vii) Information Technology: Information Technology Development, Information Technology Promotion, and Database.

(viii) Law: Litigation, Legal advice, Legislation, and *Environment.

(ix) Literacy: Literacy Campaigns, Continuing Education, and Vocational Education.

(x) Magistracy:

(xi) Revenue: Land Revenue & Estate and Excise and Taxation.

(xiii) Works and Services: **Housing, Urban & Rural Development, District Roads and Buildings, Energy and Transport.

Part D

Group of Offices Offices

(i) Public Transport Public transportation and mass transit
Passenger and freight transit terminals
Traffic planning, engineering and parking

(ii) Enterprise and Investment
Promotion
Industrial estates and technological parks Cottage, small and medium sized enterprise promotion
Investment promotion and protection

(iii) Depending upon the economies of scale and nature of infrastructure the City District Government may set up district municipal offices for integrated development and management of the following services:
a. Water source development and management, storage, treatment plants, and macro-distribution.
b. Sewage tertiary and secondary network, treatment plants, and disposal.
c. Storm water drainage network and disposal.
d. Flood control protection and rapid response contingency plans.
e. Natural disaster and civil defence planning.
f. Solid waste management, treatment and disposal, including land fill cities and recycling plants.
g. Industrial and hospital hazardous and toxic waste treatment and disposal.
h. Environmental control, including control of air, water, and soil pollution in accordance with federal and provincial laws and standards.
i. Land use, zoning and classification, reclassification.
j. Urban design and urban renewal programme; promulgation of building rules and planning standards.
k. Parks, forests, play grounds, sporting, and other recreational facilities.
l. Museums, art galleries, libraries, community and cultural centres.
m. Conservation of historical and cultural assets
n. Landscape, monuments, and municipal ornamentation.
o. Urban and housing development, including urban improvement and upgrading, and urban renewal and redevelopment, with care being taken to preserve historical and cultural monuments.
p. Regional markets and city-wide commercial centres.

ANNEX – II

PROVINCIAL LEVEL CURRENT BUDGET ESTABLISHMENT COST SUMMARY
BY DISTRICT / TEHSIL / TOWN UNIONS

S. No. Name of District, Or Tehsil, Or Town, Or Union Amount Rs.

Total

ANNEX III

PROVINCIAL LEVEL CURRENT BUDGET

ZILA TAX

S. No. Name Amount

Total

OCTROI TAX

S. No. Name Amount

Total

ANNEX IV

PROVINCIAL LEVEL BUDGET CURRENT / DEVELOPMENT DETAILS OF BLOCK ALLOCATIONS

ADP # DISTRICT TEHSIL/TOWN UNION

Total

ANNEX – V

DEVELOPMENT BUDGET (PROVINCIAL LEVEL) CLASSIFICATION OF ADP SCHEMES BUDGETED AT PROVINCIAL LEVEL

ADP # NAME OF
SCHEME AMOUNT
CAT 1 CAT 2 CAT 3 CAT 4

TOTAL
SCHEMES

CATEGORY DESCRIPTIONS:

CAT 1 Schemes of Provincial Departments / Offices
CAT 2 Inter District schemes
CAT 3 Foreign Aided Projects/schemes which cannot be decentralized/entrusted
CAT 4 Other categories

ANNEX – VI

DEVELOPMENT BUDGET (DISTRICT GOVERNMENT) CLASSIFICATION OF ADP SCHEMES

ADP # NAME OF SCHEME AMOUNT
CAT 1 CAT 2 CAT 3 CAT 4

TOTAL
SCHEMES

CATEGORY DESCRIPTIONS:

CAT 1 Schemes of District Offices
CAT 2 Inter Tehsil / Town schemes
CAT 3 Tehsil / Town level schemes which cannot be decentralized
CAT 4 Other categories

SECOND SCHEDULE

[See Sections 39(b), 54(l), 67(i) & 88(b)]

Part-I

Zila Council

1. Education tax.
2. Health tax.
3. Tax on vehicles other than motor vehicles.
4. Any other tax authorised by the Government.
5. Local rate on lands assessable to land revenue.
6. Fees in respect of schools, colleges, and health facilities established or maintained by the district government.
7. Fees for licences granted by the district government.
8. Fees for specific services rendered by a district government.
9. Collection charges for recovery of tax on behalf of the Government.
10. Toll on new roads, bridges, within the limits of a district, other than national and provincial highways and roads.

Part-II

Tehsil and Town Councils

1. Local sales tax on services.
2. Tax on the transfer of immovable property.
3. Property tax on annual rental value of buildings and lands.
4. Fee on advertisement/billboards.
5. Fee for fairs, agricultural shows, cattle fairs, industrial exhibitions, tournaments and other public events.
6. Fee for approval of building plans and erection and re-erection of buildings.
7. Fee for licenses or permits and penalties or fines for violation of the licensing rules.
8. Charges for execution and maintenance of works of public utility like lighting of public places, drainage, conservancy, and water supply.
9. Fee on cinemas, dramatical, theatrical shows and tickets thereof, and other entertainment.
10. Collection charges for recovery of any tax on behalf of the Government, District Government, Union Administration or any statutory authority.

Part-III

Union Councils

1. Fees for licensing of professions and vocations.
2. Fee on sale of animals in cattle markets.
3. Market fees.
4. Fees for certification of births, marriages and deaths.
5. Charges for specific services rendered by the union council.
6. Rate for the remuneration of union guards.
7. Rate for the execution or maintenance of any work of public utility like lighting of public places, drainage, conservancy and water supply.

Note: The Local Government Tax structure is under review by a joint Committee of the Ministry of Finance and N.R.B will be finalised in juxtaposition with its recommendations.

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