Funds likely to go to salary payments
Funds worth Rs220.5m have been released to six local government bodies by the Sindh government for July, in what is being said is a regular monthly payment.
Local government bodies manage cities and towns.
The Sindh finance department has started the process of releasing special grant funds to District Council Karachi (which covers Karachi’s rural areas), Karachi’s DMC South and the province’s three municipal corporations (Hyderabad, Larkano and Sukkur). Money will also go to Town Committee Bulri Shah Karim in TM Khan.
KMC and Karachi’s five other DMCs are not mentioned.
The finance department note, dated July 3, 2019, says that the money qualifies as “additional grants” for the month to help “resolve the bottlenecks”. Two bureaucrats with knowledge of the local government and finance department explained that as these local bodies are cash-strapped, they will most likely use the money to pay staff salaries.
District Council Karachi will receive Rs50 million and DMC South Rs80 million.
The Hyderabad, Larkano and Sukkur municipal corporations will receive Rs30 million each. And Town Committee Bulri Shah Karim of Tando Mohammad Khan will receive Rs500,000.
Just to give you an idea of Hyderabad’s municipal budget, last year, it was Rs2.6 billion. It had to pay Rs1.6 billion in salaries and pensions from it, which comes to roughly Rs128m a month. So if it receives Rs30 million in July right now, it would be reasonable to assume it would have to put that money towards paying salaries and pensions.
It will take a while for the paperwork to be done for the money to be deposited in their Sindh Bank accounts. The funds have been sanctioned as the Sindh Budget set them aside for 2019-20.
Local governments have a hard time earning their own revenue and rely on the Sindh government for money as well. The Sindh government budget provides for them but because it is struggling for cash itself, it is not always able to send money along regularly. Sindh relies itself on the federal government for funding.
The District Council Karachi is separate from what we know as KMC or the Karachi Metropolitan Corporation. The District Council Karachi is for the rural areas.
No money for KMC was mentioned in this particular note or for the other DMCs: East, Central, West, Korangi and Malir. The mayor of Karachi has been vocal about his ability to generate revenue to be able to run KMC.
KMC is supposed to get Rs430 million a month from the Sindh government. A court recently ordered that the Sindh government has to pay KMC’s electricity bills for Rs580 million in five installments, out of which three have been paid.