In our previous reflection on the failed governance architecture of Pakistan, we diagnose how the absence of functional local governments has eroded democratic responsibility.
But to completely understand why local governance has collapsed, we must deepen a more systemic failure, fiscal and economic decentralization within the provinces.
Much of our national speech is still concerned about the Federal-Provincial War Strip on the Prize of the National Finance Commission (NFC). However, a more urgent and subexplored question is inside: how are the provinces govern and why they have not been able to train the same districts and tehsils aimed at delivering basic services to citizens?
The amendment 18 promised to bring people closer to the government. He returned many subjects from the federal level to the provincial, but the return stopped there.
Instead of empowering the districts and Tehsils, the provinces consolidated power in their own capitals. As a result, provincial bureaucracies and legislators control development budgets, while local governments remain stripped of authority and resources.
The tragedy is that, although Pakistan continues to debate article 160 and the NFC award, its provinces have not been able to operationalize their own provincial finance commissions (PFC) effectively. Without fiscal transfer mechanisms to local governments, governance remains unequal and antidemocratic.
Punjab lasts an interim PFC prize in December 2016, based on a formula that included population, poverty, education and access to drinking water. However, it has not been updated since then, despite the 2023 census and the persistent development disparities in its regions.
In Sindh, the last PFC award was in 2007, more than 16 years ago, which represents all arbitrary and non -transparent intraprovincial resources distribution bread.
Khyber Pakhtunkhwa announced his latest PFC award in 2020, which was partially implemented. And the last Baluchistan PFC award was made in 2007, with an insignificant fiscal decentralization to local councils since then.
The lack of updating these PFC means that provincial governments continue to distribute resources through ad hoc decisions, political sponsorship or “development schemes” approved centrally linked to legislators, instead of through any assignment based on formulas and sensitive to need.
The departments of the local government in all the provinces now operate as shadows of what they ever promised. In Punjab, the Department of Development of the Community and Local Government (LG and CDD) has undergone multiple structural changes, but without the local councils chosen until recently, most of the powers continued with the administrators.
In all areas, the local governments chosen do not yet have tax autonomy, since budget allocations, hiring and development schemes remain controlled by the provincial authorities.
In Sindh, the local government department of Sindh exists mainly to execute schemes centrally controlled in urban areas, especially Karachi. Their municipal corporations are sub -financed, unable to increase income independently and strongly.
The Local Government Department of KP has perhaps approached the introduction of a structural reform, especially with the implementation of the 2013 Local Government Law and its additional amendments in 2019 and 2021, but also suffers from irregular elections, transfers of limited funds and superimposed authority with provincial departments.
In Baluchistan, the structure of the local government is the weakest. With a limited income generation capacity and practically without block transfers in the province, the representatives chosen at the local level fight to even perform basic municipal functions.
Sources of income for local governments remain severely limited in all areas. The main sources of property tax, license rates, local tolls and market rates are retained by the provincial or poorly managed government. The property tax, a potentially robust source of urban financing, is still collected by the provincial departments in Punjab and Sindh.
In KP and Baluchistan, capacity gaps mean that their real collection is minimal, even when some taxes are nominally assigned to local organisms. Local councils are pursuing special subsidies or favors without significant income or predictable tax transfers.
The result is an empty government system. Local governments are expected to respond to services provision, such as solid waste management, drinking water and local infrastructure, without tools or funds to do so.
The mayors or presidents elected become masks, limited by the provincial control over finance, publications and planning. Bureaucratic administrators in parachute during periods without local elections alienate even more governance citizens.
These gaps are not only administrative but deeply political. In all provinces, legislators perceive that local governments empowered as a threat to their development control. When the tax and administrative authority flows to the local representatives chosen, interrupts the predominant model of the sponsorship policy.
This explains why PFCs are delayed or turned without teeth, why the elections are postponed routinely and why the provincial departments maintain control over municipal level decisions.
To reverse this slide, a set of reforms is urgently needed. The provinces must activate their PFC and update their formulas in the light of the last census, mapping of poverty and development needs. PFCs should not be symbolic committees; They must have independent technical contributions, parliamentary supervision and public transparency.
At the same time, local governments should receive their proper participation in income instruments, such as property tax, user rates and local commercial taxes, with capacity construction support to administer them efficiently. The creation of budgets, development planning and the provision of services must be decentralized in practice, not only in principle.
The Federal Government can also push this process by linking future NFC awards with performance indicators on intraprovincial equity, transparency and empowerment of the local government. If the provinces want most of the national cake, they must show how they distribute their own portion equitably.
Local governance is not a secondary problem; It is the first point of contact between citizen and state. When a garbage stack is not raised, a flotation line exploits or a school remains closed, it is the local state that is missing. And when the local state is absent, the legitimacy of the entire system erodes.
Democracy is not just about elections. These are institutions that serve people in their daily lives. To save the governance of the edge, Pakistan must decentralize politically, fiscally and economically. The answers are not found in Islamabad, or even Lahore, Karachi, Quetta or Peshawar. They are found in the halls of the Tehsils and Towns Council, if we choose to empower them.
The writer is associated with the Institute of Sustainable Development Policy (SDPI), Islamabad. The article does not necessarily represent the opinions of the organization.
Discharge of responsibility: The views expressed in this piece are that of writer and do not necessarily reflect the editorial policy of PakGazette.TV.
Originally published in the news
