P I D E S c h o o l o f P u b l i c P o l i c y

Muhammad Waseem Sajjad

M.Phil. Public Policy

mwsmusa@gmail.com

Islamabad Capital Territory Local

Government Act,2015

DEVOLUTION AND LOCAL GOVERNMENT

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Table of Content

1. Introduction…………………………………………………………………………………………...2

2. Brief History of Local Government in Sub-continent……………………………...3

2.1 Local Government Orders 1969-1979………………………………………….5

2.2 Local Government Ordinance 2001……………………………….…………….6

3. The LG Act, 2015 (Chapter I – VII)…………………………………………….…............9

3.1 Local Government Elections……………………………………………….……..11

4. Issues with CDA and Management of CDA………………………………………..….12

5. Metropolitan Corporation……………………………………………….………..14

5.1 Local Government Finance………………………………………………..……….14

6. Approaches to Fiscal Decentralization………………………………………..….….….18

6.1 1st Generation ………………………………………………………………………………..18

6.2 2nd Generation …………………………………………………………..…………………..18

7. Relations of Islamabad Local Government with Federal Government……18

7.1 Legal Relations…………………………………………………….……………………..19

7.2 Power of Court………………………………………………………….………………..19

7.3 Power to punish……………………………………………………………….………..19

7.4 Collection of Fine……………………………………………………………………....19

8. Critical Analysis……………………………………………………………………………………..20

9. References…………………………………………………………………………………………….21

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1. INTRODUCTION:-

Pakistan is a federation in which the affairs of government are guided by the

Constitution of Pakistan of 1973, with all amendments. In the constitution the allocations of the

functions of the federal and provincial governments are clearly specified. There are some

functions which are the exclusive responsibility of the federal government, while others

according to the constitution can either be performed by the federal or by provincial

governments. The existence of local governments is not formally embodied in the constitution.

Local governments in Pakistan exist under the supervision of the various provincial

governments, where provincial governments have merely delegated some of their functions

and responsibilities to local governments by the promulgations of ordinances. The Loca l

Government Ordinance of 1979, with its amendments, is in operation in Punjab, Sindh and the

NWFP, while Baluchistan's local governments are under the 1980 ordinance. These ordinances

specify the allocation of residuary functions of local governments [AERC 1990b]. Before we

briefly examine the history of local governments in Pakistan, and then turn to the existing

statute of municipal local governments, it is important to emphasize the point that elected local

governments exist only in the sparsely populated province of Baluchistan. Other local

governments stand dissolved. In the NWFP, all local bodies were dissolved in 1991, in Sindh in

1992, and in the Punjab in August 1993.Different reasons exist as to why the provincial

governments dissolved the local governments in their own provinces. In the case of NWFP,

mismanagement and corruption were cited as reasons, while the Punjab provincial government

dissolved its local governments in order to ensure that national elections held in October 1993

were not influenced by incumbent local government officials. Thus, in the absence of

democratically elected local government officials in the rural and urban areas, town

committees, municipal committees, and municipal corporations are all being run by

administrators who are members of either the federal or provincial public (civil) service cadre.

Administrators are appointed by the provincial government and are transferred between

different posts for unspecified duration of tenure.

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2. BRIEF HISTORY OF LOCAL GOVERNMENTS IN SUB CONTINENT:-

Local governments have existed in the Indian subcontinent for many centuries, with the

first municipal corporation set up in Madras in 1688 by the East India Company. In 1842, the

Conservancy Act which led to the formation of sanitary committees for garbage disposal

became the first formal measure of municipal organization which applied to the Bengal

presidency. In Karachi, the board of conservancy was established in 1846, while in Lahore and

Rawalpindi, the Municipal Act was passed in 1867. Subsequently, Lord Ripon's resolution on

local self-government in 1882 allowed for the provision of some elected members in municipal

committees and proposed the establishment of rural local governments. The 1907

Decentralization Commission recommended the appointment of non-official chairman of

municipal committees, a recommendation which was endorsed and extended further by the

1925 Simon Commission set up to assess the performance of local self-government. The 1935

Government of India Act allowed provincial autonomy and permitted provinces to frame

legislation on local government systems.

Historical Overview

The Constitution of Pakistan establishes the state as a federal parliamentary republic,

comprising four provinces: Punjab (95 million), Sindh (41.3 million), Balochistan (8.8 million)

and Khyber Pakhtunkhwa (23.3 million). Administratively, the country is divided into Districts,

Tehsils (sub-districts) and Union Councils, with each Union Council comprising a number of

villages.

Islamabad is situated at the great belt of Potohar Mountains and Margalla hill at the end of this

belt. A city known for its ‘greenery’ with pollution free and healthy atmosphere and owns

plenty of water resources. The city is considered as most organized and well planned among all

cities across Pakistan.

It is not a part of any province. The land for the proposed capital was original ly acquired by the

then Government of Punjab and KP in 1960, which for some time, remained under

administrative control of Rawalpindi District/Punjab Government which was later separated

from Rawalpindi district. The newly formed ICT was divided into five zones.

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The city is divided into each sector, with four sub-units of a sector facilitated with a Markus

(Commercial center), a community center, park, school, college and several public goods and

services.

The Islamabad is administrated under the Islamabad Capital Territory Administration (ICTA)

which is powered as a distinctive administrative unit of the country functioning under Article

1(2)b of the Constitution. It is delimitated with two constituencies in the NA, named as NA-48

and NA-49.

Historically, the capital was divided into Urban and Rural Islamabad. The rural Islamabad

administrated fewer than 12 UC’s (elections held haphazardly) which further compromised 133

villages while the Urban Area functioning under Municipal Corporation (CDA).

However, a universally acceptable form of the federation that guarantees a balanced

distribution of power among the federating units, including the local governments, remains an

elusive goal. Two factors have contributed to this. First, it was not until 1958 (11 years after

Pakistan's independence) that political leaders and parties agreed on a constitution, which was

subsequently amended twice. Second, the military took the country's reins at several critical

junctures and experimented with various forms of local government, primarily surrogates for a

parliamentary form of democracy.

The revival of local governments continues to be debated, despite the fact that the 18th

Amendment to the Constitution of Pakistan has made it mandatory. Article 140(A) of the

Constitution explicitly states, "Each Province shall, by law, establish a local government system

and devolve political, administrative, and financial responsibility and authority to the elected

representatives of the local governments." Moreover, sub-clause 2 of the same article

stipulates that "Election to the local governments shall be held by the Election Commission of

Pakistan."

Since the country's political transition in 2008 and, particularly, after the passage of the 18th

Constitutional Amendment, the following trends are visible. First, the provincial leaderships

have reluctantly passed the LG laws and taken steps to hold local elections. Second, the

provinces have shown a preference for, and a considerable degree of unanimity in, restoring

the Commissioner system, whereby the provincial governments manage local government

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functions directly through the provincial bureaucracy, rather than continuing with the

devolution reforms elected by the previous LG Act of 2001. Third, demographic changes, and an

unprecedented rate of urbanization, have made local governments a necessity and not simply a

choice. Fourth, there is growing awareness among civil society, media and policy analysts that

local governments are a must for efficient and accountable governance. Finally, a series of

landmark decisions and persistent interventions by the higher judiciary have made it impossible

for the provincial governments to hold up the local government elections.

These trends raise several questions. Why have the provincial governments been reluctant to

revive the local governments? What has caused the return to the Commissioner ate system?

Why do three provinces still lack a political consensus on the main characteristics of the LG

laws? What can be done to ensure that the revival of the LG Acts improves governance, service

delivery and citizens' participation at the local level? In the following pages , I will address some

of these questions.

2.1 Local Government Orders 1969 and 1979:-

Subsequent military regimes (1969-71 and 1977-88), adopted the same model of

promoting local government while maintaining centralized control at the federal level. Thus,

rather than a federal principle, the local government came to be identified with the military

regimes as an instrument of delegitimizing the party system and provincial autonomy, while

trivializing political processes and power sharing at multiple levels (federal, provincial and

local).

The Local Government Order 1979 expanded the local governments and empowered

the Deputy Commissioners. This ordinance created four levels of municipal government in the

urban areas: Town Committees, Municipal Committees, Municipal Corporations and

Metropolitan Corporations. Members of each council elect the senior officers of these councils

and the controlling authority is the elected house. In the rural areas the system provided for a

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three-tier

Figure-I

system of local government, where Union Councils, Tehsil or Taluka Councils and District

Councils came into existence. The chairmen of these councils were elected by the members. In

1979, the citizen of Islamabad cast vote in local election but in limited areas means only in rural

areas. As the figure-I show that some area came under the Capital development authority and

remaining came under ICT LGO 1979. In 1979, there are 12 union council where local election

held on non-party based.

2.2 Local Government Ordinance 2001:-

The Local Government Ordinance (LGO) 2001 removed the urban-rural divide and established

local government at three levels: Union Council, Tehsil/Taluka Council and District Council

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levels. The Union was the basic unit and the Union Nazims (mayor) and Naib (deputy) Nazims,

directly elected by the voters, became members of the District and Tehsil Councils, respectively.

The LGO did not establish any hierarchical relationship between the local and provincial

governments, but networked the former with the National Reconstruction Bureau and the

President's office.

It devolved administrative, financial and development powers to the elected officials in

the local councils and all the government departments became accountable to the District

Council. The Deputy Commissioners were re-designated as District Coordination Officers and

subordinated to the District Nazim for executive approvals, performance evaluations and

transfers/postings. The role of police oversight by the Deputy Commissioners was abolished

and the district police chiefs became directly accountable to the District Nazims.

The LGO changed the political and social landscape by bringing more than 150,000

people into the political arena and creating more than 6,000 councils. According to one report,

38 percent of the newly elected councillors reported that they had never contested an election,

nor had anyone from their family. Another important feature of the LGO 2001 was its allocation

of reserved seats for women (33 percent), minorities, professionals and peasants, although

women's participation was constrained in some parts of the country by the local jirgas, tribal

leaders, and biradaries.

Finally, the LGO provided for several forums, such as District Monitoring Committees, to

oversee the work of government departments, Citizens Community Boards to allow direct

citizen participation in designing and overseeing development schemes, Musalehat-e-Anjumans

(consultative bodies) for alternate dispute resolution, and Citizen Police Liaison Committees for

promoting rule of law and protection of rights.

In Musharraf era’s in year 2002, there were two new ordinances promulgated, which were

proposed by National Reconstruction Bureau (NRB), a non-ministerial regulatory body which

exclusively worked out to carry out a new devolution plan for Pakistan. However, the two

ordinances were not implemented even being promulgated, hence no elections were held:

(i) Islamabad Capital Territory Local Government Ordinance, 2002.

(ii) Islamabad Capital Territory Local Government Elections Ordinance, 2002.

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The then dictator Government kept confuse in discussing the pros and cons of the two bills, and

no elections were held finally. Now, after about 13 years (in 2015), the two ordinances were

merged into once Bill, called “Islamabad Capital Territory Local Government Act, 2015”.

The military regimes in Pakistan have generally favoured reliance on local government for at

least three reasons: first, political exclusion of the incumbents by changing the rules of the

game; second, alliance with the bureaucracy to manage the centralised and hierarchical

structures; and, third, creating a political elite by introducing new politicians through the local

government laws.

The impact of the three local government laws and elections has been different and

nuanced. The BD 1959 revived and consolidated the prestigious Civil Service of Pakistan (CSP),

whereby the District and the Deputy Commissioners became the lynchpins of the regime and

pursued politics of patronage and the development goals of the regime.

Under the military regime of Field Marshal Ayub Khan (1958-69), the military governed

and the CSP ruled. That also led to the creation of a new set of political elites, who became

members of the 80,000-strong BD system (later raised to an electoral college of 120,000).

However, with the downfall of the military regime, the CSP also came under criticism. The 1969

mass movement and protests also tarnished the glory and image of the bureaucracy in general,

but particularly the CSP.

The Civil Services Reforms of 1973 under Prime Minister Zulfikar Ali Bhutto (1971-77)

further eroded the power and prestige of the CSP, who were now labelled as the District

Management Group (DMG).

General Zia-ul-Haq, who assumed power by dismissing the government of Zulfikar Ali

Bhutto in July 1977, sought legitimacy again through the Local Government Ordinance 1979.

The regime revitalised the districts, while delegitimising politics at the national and provincial

levels, and resuscitated local government (elections were held in 1979, 1983 and 1987). During

this period, the CSP and the DMG were able to rehabilitate their positions both in the policy

arena and in the districts.

When General Musharraf seized power in October 1999, the military regime sought the

international community's support by promising a return to democracy, improved governance,

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and reforms in the social and economic sectors. The local government plan emphasised the

1973 Constitution by invoking the separation of the executive and judiciary. It sought to reduce

the role of the CSP, particularly the DMG, by restructuring the civil service at the district level

and subordinating it to the elected representatives.

The offices of Division Commissioner and District Commissioner (DC) were abolished

and their roles and functions were distributed to the District Government headed by the

elected mayor (Nazim) and including a District Coordination Officer (DCO) who reported to the

Nazim. The magisterial powers of the DC were withdrawn and given to the judiciary and police.

The role of police oversight formerly held by the DC was abolished and the responsibility of law

and order was entrusted to the Nazims.

3. The LG Act, 2015 (Chapter I – VII of the LG Bill, 2015): (Sajjad Yousaf)

The Local Government to be established has to observe the laws applicable to

Islamabad Capital Territory. The jurisdictions of these laws spans to the Constitutional

commitments that the State carries into the Capital. The assets of the states are located in the

city. So, it is obvious that Local Government is certainly bound to very extent not to interfere in

Capital’s classified issues.

The development, planning and overall maintenance of the Master Plan of the area

specified has to be kept with CDA. The CDA being a capable and well versed with the projects in

hand and key organization to evolve Islamabad could be the best facilitator to manage

infrastructural issues of the city. The LG, contracting roads or development of sectors could find

it difficult whereas there’s a readily available institution to do so.

The Local Areas of the Islamabad under the new act are so divided such that the old-

aged, controversial rural-urban divide finally came to an end. The delimitation of constituencies

shall be carried out by the Government (Federal Government) by consent of two UC’s winning a

two-third majority of their total membership shall be able to delimitate their constituency.

However, the revenue powers shall not be divided and so does the size of the population will

be kept equal to as much of possibility of occurrence. The limitation process shall not be

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scheduled if an election if announced for that area. Similarly, the Government may even divide

the Local Government into two or more Local Governments, also dividing the existing members

such that they are incorporated into the newly formed Local Government.

The Constitution of Local Governments shall be:

(i) Metropolitian Corporation for ICT.

(ii) Union Councils for ICT.

The composition of A Union Council shall exist:

(i) Chairman and Vice Chairman (as joint candidates);

(ii) Six general members;

(iii) Two women;

(iv) One peasent or worker;

(v) One youth member and

(vi) One non-muslim member.

Whereas the composition of a Metropolitian corporation shall be:

(i) Mayor and Deputy Mayor, as joint candidates;

(ii) Chairmen of all Union Councils;

(iii) Women;

(iv) Peasent/workers;

(v) Technocrats;

(vi) Youth members and;

(vii) Non-muslims

The number of women shall not be less 33%, peasent/workers, non-muslims and youth

shall not be less than 5% while technocrats should not be less than 2%. However, these

numbers will be computed by the Government through timely notifications.

The Mayor and Deputy Mayors shall be jointly elected in the first session of

Metropolitian Corporation from among the members of the UC. (The Mayor and Deputy Mayor

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shall be indirectly elected while all the members of the UC are to be elected directly through

Elections).

3.1 LG Elections:

The election of members of all local governments (UC and Metropolitan Corporation) is

to be carried through secret ballot on the basis of adult franchise. The Election Commission of

Pakistan (ECP) shall conduct the Local Government Elections. The eligibility to caste vote stands

due for:

(i) Citizens of Pakistan;

(ii) Not below the age of 18; and

(iii) Fulfilling other conditions (if specified by ECP)

The electoral rolls shall be made by the ECP, free of errors and omissions.

After doing so, the ECP shall appoint Returning/Assistant returning officers for each

constituency and perform his/her duties as imposed by the ECP. The Returning officer shall

establish a polling station in light of the directions by the ECP, especially maintaining the fact

that the polling station shall not fall under constituency of a candidate.

A returning officer will than appoint a presiding officer for each polling station atleast

fifteen days before polling, not changing any duty plan but except after the consent of the ECP.

The Presiding officer shall be bound to carry out polling following the directions provided

therein the act.

A candidate stands eligible to take part in the LG Elections if he/she fulfills:

(i) Citizenship of Pakistan;

(ii) Youth member, not less than 25 years of age; or

(iii) Enrolled voter in electoral rolls of the UC.

The Union Council is the corporate body having a perpetual succession and a common

seal, power to acquire and hold property and enter into any contract with its Chairman being

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the executive head. The functions of a UC shall be carried out under CDA Ordinance, 1960 and

as specified in the second schedule of the bill.

The office of Local Government shall stand for five years after holding its first meeting.

The Mayor, Deputy Mayor, Chairman, Vice Chairman or member, shall take an oath; also

declaring their assets in prescribed manner.

If the seat of Mayor, Deputy Mayor, Chairman or Vice Chairman or a member falls

vacant due to any reason, the new candidate shall be elected within thirty days. In case there is

vote of no-confidence, the Mayor or Deputy Mayor shall cease to hold office if it is won by two-

third majority. The motion of vote of no-confidence shall not be moved before one year of

assumption of office of both. If the motion of vote of no-confidence fails to attain majority,

there shall be no further motion for upto one year the date the previous motion was moved.

Finally, the Executive authority of a local government shall be exercised by its Mayor or

Chairman. For Metropolitan Corporation, the Government shall appoint a Chief Officer; as

many of such as she may. Such officer will be known as Principal Accounting Officer and in case

of a Union Council, the Chairman shall be the PAO.

The Chief Officer shall coordinate between the metropolitan Corporation and the UC’s in ICT.

He shall be responsible to oversight the Metropolitan Corporation. The Government may also

divide function of Government into one or more of its functions to Local Government for

improved and efficient service delivery. Similarly, the Metropolitan Corporation may also

devolve one or more of its functions to the UC’s.

4 Issues with CDA and Management of CDA: (Sajjad)

The first version of the said bill was passed by the National Assembly. The bill was made

controversial when CDA employees protested complaint and perused the Standing Committee

of Senate to look after their grievance. The controversial clauses lead to their job-insecurity and

dilute CDA by the passage of time. (The bill was first passed by the NA, which later removed

these clauses):

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The Bill which was first passed by the NA (later amended by Senate) clearly envisages

transfer/allocation/reallocation of CDA employees.

124(4); 123 (4): “However, the protection upon such transfer / allocation or reallocation

is diluted, if not vague. The protection is limited to “salaries, emoluments and pensions”.

125(4): “Additionally the guarantee of the Government towards payment of salaries is

till such time as the government may deem appropriate.”

130(2): “The Governmeny may be notification, assign any of the functions of the Union

Council or the Metropolitan Corporation specified in the second and third schedule respectively

to any statutory body or public or private company.”

One assignment takes place to the private company, all transfers from CDA performing

those functions would be easily thrown out by the Municipal Corporation and / or the Union

Council.

72(2): “The Metropolitan Corporation may entrust any of its functions to a person,

authority, agency or company, through a contractual agreement, on such terms and conditions

as may be prescribed”. (which means that the Metropolitan Authority was not bound to

contract out CDA, tenders may have horse trading and role of CDA will completely be

relinquished).

Clause 36(1), 36(2) and 36(5) related to transfer of CDA employees to Metropolitan

corporation or UC was aggressively opposed by the Senate’s sub-committee of the Standing

Committees as well as the CDA Mazdoor Union.

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5. Metropolitan Corporation

In ICT local government bill, Islamabad declared a metropolitan corporation which is a body

consists of 66 members (50 direct elected, 9 women member, 2 minorities member, 1

technocrat and 2 youth), 3 deputy mayors and 1 mayor a detail in figure-II. The Metropolitan

Corporation base on three main actors i) Mayor and deputy mayor, ii) Chief Officer and iii)

Municipal office. Metropolitan have the power to acquire and hold property and enter into any

contract and may be sue and be sued in its name. Metropolitan Corporation performed

function mention in the fourth schedule of

I. Capital Development Authority Ordinance 1960

II. ICT Zoning Regulation 1992

And metropolitan corporation may perform these function through a person, an authority,

agency or company through contractual functional.

In Metropolitan Corporation a mayor is the executive head of the system and supported by the

deputy mayor, there can be more than one deputy mayor; currently there are three deputy

mayors in ICT- Metropolitan Corporation. The most senior deputy mayor will precede the daily

work of Metropolitan Corporation in the absence of mayor. The mayor shall provide the vision,

direction, priorities the issues and then designed the strategies for achieving the priorities of

governments. And also mayor prepare the tax proposal and budget and devise the mechanism for the accountability and oversight of Metropolitan Corporation.

The mayor review the performance of the Metropolitan Corporation in order to improve

I. Economy, efficiency and effectiveness

II. Efficiency of revenue collection service

III. Implementation of the bye-laws

The chief officer main responsibilities are coordination, internal audit, human resources

management, public relation, legal affairs and emergency service. The other main task of the

chief officer is to check ensure the implementation of rules and laws.

5.1 Local Government Finance:-

Public finances in Pakistan have been characterized by high fiscal deficits, poor revenue

mobilization, a persistent trend of centralization, massive vertical imbalances between federal

and provincial governments (i.e. very large gaps between provincial governments’ expenditures

and own revenues, which have to be made up by means of fiscal transfers from the federal

government), weak financial management and lack of accountability of the public sector.

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A stable and meaningful decentralization requires an unambiguous and well -defined

institutional framework in the assignment of expenditure responsibilities among the different

levels of government. This is by no means the only condition, but it is the most important. For

example it is also necessary to have sufficient budgetary autonomy to carry out the assigned

responsibilities at each level of government. According to the ICT-Local Government act 2105,

the administrative and financial authority for the management of the offices of the

Government specified in Eighth and Ninth Schedule of the Act. Following Table described

responsibility of Metropolitan Corporation.

No.

Responsibility

No.

Responsibility

1 Animal 9 Development Planning

2 Boundaries and trees 10 Public Health and Sanitation

3 Burial Places/Graveyard and Cremation

11 Public Safety

4 Culture 12 Registration of Births, Deaths, Marriage and

Divorce

5 Dangerous and Offensive Articles and Trade

13 Social Welfare and Community Development

6 Drainage and Sewerage 14 Streets and streets lighting

7 Food and Market 15 Trades and occupations

8 Licensing 16 Public Vehicles and Parking

17 Water Supply

Figure-II

The local government within limitation can prescribed the honoraria for the mayor, deputy

mayors and members of local assembly. The local government shall not incur any debt without

the previous approval of the central government but invest it surplus in different project with

approved by the government. The annual budget of the local government consistent on the

following elements

i. grants from the Government

ii. Amounts available in the Local Fund

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iii. Receipts for the next year

iv. Expenditure to be incurred for the next year

The Local Government Plan acknowledges the importance of resources for the local

governments in the following words: “The principle of the formula for provincial to district

transfers is that district and local government should generate their own resources to the

extent possible. Incentives should always encourage financial self-sufficiency to the extent

possible at each level. However, the current quantum of funds being used by the provinces will

ensure the working of the district administration and the political system. Untangling provincial

finances and simplifying funding processes and the financial plumbing will result in increased

efficiency”. Accordingly, it lists out taxes, which may be levied by various levels of the local

government in the fourth schedule of the ICT Local Government Act 2015. Following are the taxes that levies by the local government

Taxes and Levies

N0. Metropolitan corporation Union Council

1 Water Rate Taxes

2 Drainage rate Entertainment tax

3 conservancy rate Birth and Marriage registration fee

4 fee of construction fee on UC service

5 land changing fee Fee of Public utility i.e. drainage, water etc.

6 licenses fee community tax

7 slaughter house fee fee for licensing of professions and vocation

8 tax on profession, trade any other tax/levy authorized by the

government

9 market fee

10 tax on sale of animal

11 toll tax

12 fair and industrial show fee

13 parking fee

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Figure-III

First and second generation approaches to fiscal decentralization and ICT Local Government

Act. 2015

6. There are two approaches to fiscal decentralization

I. First Generation Approaches

II. Second Generation Approaches

In the 1st generation approach main contributor are Musgrave, Tiebout, Olson and Oates.

People select a representative for better services provision, individual net benefits from the

public service delivery may extend to political boundary. Sometimes political boundary may

extend to economics boundary but these both are inefficient situation. When an economic

boundary of public goods match with political boundary, is best explained by the 1st generation

theory. Main focus in 1st generation theory is on a) service delivery responsibility b) revenue

raising power c) intergovernmental fiscal transfer and d) subnational borrowing.

The 1st generation theory said that pure public goods best provide by the central government

and fiscal equivalence and decentralization theorem should match with economic and political

boundary of third tier of government. In case of ICT pure goods are provided by the federal but

it didn’t meet the fiscal equivalence and decentralization theorem. First generation said that

there should be clear assignment of responsibility but in ICT and CDA many responsibilities

didn’t clear that leads to higher transaction cost and fiscal illusion.

According to ICT Local Government Act. 2015, local government perform huge number of

responsibilities but the revenue raising power of local government very limited which meet by

fiscal transfer from federal government. When local government fails to meet its expenditure

then in many developed and developing countries can borrow. But in case of ICT borrowing

constraints are higher are also.

The second generation theory main consideration is i) Political process and behavior of political

agent and ii) Asymmetric information and political agent. Seabright (1996) introduced the

notion of “incomplete contract”. In case of incomplete contract federal govt. can efficiently

provide the services same case in ICT local government, there is incomplete contract. Weingast

(1995) introduced the notion of market preserving federalism to investigate the competing

jurisdiction but there is no competition in between jurisdiction. Weingast said SNGs have

regulatory responsibilities but in case of ICT there is regulatory responsibilities and also

common market.

7 The Relations of Islamabad local government with Federal government

The local government if capital terrorist of Islamabad has a unique nature due to absence of

provincial government it has working relations with Federal Government of Pakistan. The

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Federal government shall constitute a commission it has a chairman, the chairman can be a

technocrat, a retired government officer or an eminent citizen. The Commission shall have

members including a minority and women from Islamabad municipal area. This commission

shall also include a serving member of Federal government not below the rank of BPS 19

nominated by Chief Commissioner Islamabad. This member will directly report to Chief

Commissioner Islamabad. Commission shall be a consultative body, shall discuss perks and

privileges of Mayor and deputy mayors. But the local government administratively shall be

under CAAD (Capital Administration and development) Ministry of interior government of

Pakistan. The CDA (Capital Development Authority) shall execute the development and maintenance works of Islamabad.

7.1 Legal Relations

The federal government shall direct local government of Islamabad on a specific issue. On the

other hand the local government of Islamabad requests federal government to issue a direction

on a specific problem and prevailing situations. But federal government shall not issue

directions on day to day business of ICT local government. The rules of business are defined in

Islamabad local government bill 2015. The mayor has no power of ACRs of IGP Islamabad

Police, Chief Commissioner, Chairman CDA and all bureaucrats which are functioning in

Islamabad.

7.2 Powers of Court

The local government of ICT has powers of civil court. It can summons any person, give stay

orders, punish and stop any work, projects which are violating the By-Laws of Local government

of Islamabad. But it has no powers of Criminal court under CRPC 1889 act and local government act of Islamabad 2015.

7.3 Powers to punish

The Schedules which are defined in local government act 2015 gives the structure of

punishment of cognizable offences. The schedule V defined as punishment of Fine of Rs 5 lacs and imprisonment of 5 years. The schedule VI defined as fine of Rs 5 lacs and no imprisonment.

7.4 Collection of Fine

The fine shall be collected through ticketing system, and fine shall be deposited in National Bank

or treasury of government of Pakistan in account of Local government of Islamabad

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8. Critical Analysis;-

I. Capacity Issues; The members, Mayor and Deputy Mayors of Metropolitan Corporation

can lack knowledge, experience, and skill to understand and work under the new

system. As discussed above mayor give vision, set priorities and then make strategies

for to achieving these priorities but current Mayor Lack capacities to handle this work.

Capacity has emerged as one of the very important constraints on the functioning of

the system.

II. Political Affiliation:- Currently ICT local bodies election held on party bases a large

number of members belong to opposition party and their affil iation become constraints

in the fund transfer and other administrative issues. Part in power create hurdle in the

way of these members.

III. Overlapping and Coordination failure: - In ICT 2015 bill many roles of mayor and chief

officer overlap that will increase the transaction cost and lead to underdevelopment.

Also many departments involve in Metropolitan Corporation but they fail in properly

coordination.

IV. Dependency on federal/ provincial transfer: - there are number of resources of tax

generation but then also local government depends on the state government.

V. Capacity issues in tax collection: - Local government face many issues in tax collection,

as discussed in the act if local government fail to collect tax then government will

collect the tax.

VI. Audit Issues: - Mention in the ICT- LG act 2015 that chief officer will audit and written

that secrecy also audit the expenditure and cost. There is no proper channel of

recording and maintain the transactions of government.

VII. The federal government has a upper hand on Local government in its liaison with local

government

VIII. The opposition members of local assembly have reservations that they will not

be given funds for development as compared to treasury members.

IX. The dual legal system i.e. local government and federal government shall create the

problem of responsibility and execution.

X. The powers of civil court can be misused by the mayor and other treasury official for

political purposes.

XI. The working relationship of CDA and system of deputation of officers, Non Gazetted

staff and workers is also ambiguous.

21

8. Reference

Zaidi, S. A. (November 2, 1996). Urban Local Government in Pakistan: Expecting Too Much

from Too Little? Economic and Political Weekly, 2948-2953.

http://www.pk.undp.org/content/pakistan/en/home/library/hiv_aids/development-advocate-

pakistan/local-government-acts-2013-and-province- local-government-relatio.html

http://www.pk.undp.org/content/dam/pakistan/docs/Democratic%20Governance/Federalism/International%20Conference%20Sept13/presentations/Day2/4th%20ppt%20Representitive%20LG%20Sindh%20pdf.pdf

The ICT Local Government Bill (As passed by NA), 2015.

http://www.cda.gov.pk/