Islamabad Local Government Bill 2015. This report cover i) critical Analysis ii) Administration and political power iii) Election process and iv) Local government finance and revenue power

1. Islamabad Capital Territory Local
Government Act,2015
M.Waseem Sajjad (MWS)
M.Phil. Public Policy
PIDE School of Public Policy
mwsmusa@gmail.com
15 April 2016

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Table of Content
ICT Profile1
Historical Perspective2
Legal Framework under ICT3
Local GovernmentElection and Administration4
Local Governmentfinance and Taxation5
1st and 2nd generationtheory and ICT LG 20156
7 Critical Analysis
8 Conclusion

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ICT Profile and Historical Perspective

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Historical Perspective
 New capital established at Islamabad on Feb 24th, 1960
 Part of Rawalpindi administration till June 1980
 Administrative functions assumed by Federal Government vide Presidential
Order 18 of 1980 promulgated on January 1st, 1980.
 Administrator (later re-designated as Chief Commissioner) created.
 CDA operating under CDA Ordinance, 1960

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EXISTING MUNICIPAL DIVISION
Municipal Area under
CDA
Area under 12 Ucs
under ICT LGO 1979
4/19/2016
5
Islamabad Capital Territory
Rural Area: 44% of Total ICT Area (=906 Sq.Km)
Area of ICT: Total 906 sq Km
Population: Total 1.4 M (Estimated)
1998 Census: 805,235
Existing UCs (in Rural ICT only)
under LGO 1979 : 12
Total Villages in ICT : 133

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LEGAL FRAMEWORK FOR ESTABLISHMENT
OF LOCAL GOVERNMENT SYSTEM UNDER
PROPOSED ICT LG BILL 2015

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LEGAL FRAMEWORK UNDER ICT LG
 There shall be no Rural-Urban Divide and the operations shall extend to whole
of ICT
 A two-tier system with a MetropolitanCorporationand Union Councils
 Bill envisages party based elections – S.26 (I)(k) states as follows:
26. Disqualifications for candidates and elected members. — (1) A
person shall be disqualified from being elected or chosen as, and from being, an elected member
of a local government, if he-
…
(k) has used for his election the platform, flag, symbol, affiliation and financial
or material resources or support of a political, religious, ethnic or sectarian party or
organization.

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LEGAL FRAMEWORK UNDER ICT LG BILL
 Election Commission of Pakistan has delimited Union Councils in line with the
directions of Honorable Supreme Court of its order dated 20.03.2014.
 Section 6 of the ICT LG Bill, 2015 as passed by National Assembly and pending
assent of Senate of Pakistan, requires the Government* to determine the
number of Union Councils in Islamabad Capital Territory.
 Section 15-A of the CDA Ordinance shall be repealed thus devolving municipal
functions, exercisedby CDA, to the local governments
 * Government means Federal Government under section 2(s) of ICT LG Bill, 2015

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LG ADMINISTRATION
Local Governments shall not exercise the executive authority of
the F.G.
Overall Master plan (planning function) of ICT will be held only
with by CDA.
Anything not covered under this act shall be done by LG or
otherwise Government.

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 Jurisdictions between two UC’s could be requested to F.G.
 Required two-third majority of total membership of each UC to change.
 Not quitting revenue estate functions in each UC.
 There shall be no Rural-Urban Divide and the operations shall extend to whole of ICT.
 A two-tier system with a MetropolitanCorporationand Union Councils
 A UC shall be a:
– Territorialarea.
– Shall not crossboundaries of Metropolitan Corporation.
– Uniform population.
 There shall be a LG Consisting of:
– Metropolitan Corporation for ICT and;
– Union Councils for ICT.

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 A two-tier system with a MetropolitanCorporationand Union Councils
 A UC shall be a:
– Territorialarea.
– Shall not crossboundaries of Metropolitan Corporation.
– Uniform population.
 There shall be a LG Consisting of:
– Metropolitan Corporation for ICT and;
– Union Councils for ICT.

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LEGAL FRAMEWORK UNDER ICT LG BILL
Election Commission of Pakistan to delimit Union Councils in line
with the directions of Honorable Supreme Court of its order
dated 20.03.2014.
Section 15-A of the CDA Ordinance shall be repealed thus
devolving municipal functions, exercised by CDA, to the local
governments.
The members of Metropolitan Corporation shall elect as joint
candidates from amongst the members of Metropolitan
Corporation, the Mayor and Deputy Mayor. (For first session)
Bill envisages party based elections.

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STRUCTURE OF LOCAL GOVERNMENT
 The Union Council shall consist of Chairmanand members:
– Six general members
– Two women
– One peasant/worker
– One youth member
– One Non-muslim
 The entire Union Council shall be the constituency for the election of all members
(including reserved seats).
 Chairman would provide leadership for budgeting, annual dev. plans, issue executive
order to Union Secretaries etc.

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STRUCTURE OF LOCAL GOVERNMENT
 The Metropolitan Corporation shall consist of Chairmen of all Union
Councils and shall include members on following reserved seats:
– Women
– Peasants / Workers
– Non-Muslims
– Youth
– Technocrats
The number of women should not be less than 33 percent, peasants/workers not less
than 5 per cent, non-Muslims not less than 5 per cent, youth not less 5 per cent
each and technocrat not less than 2 per cent. ”

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LOCAL GOVERNMENT ELECTIONS
 The elections shall be based on Adult franchise, through a secret ballot in the
prescribed manner, whereby the electoral rolls shall be provided by the
ElectionCommissionwhich is responsible for conduct of elections
 The requirements for a candidate include 25 years of age, citizen of Pakistan
and enrolledas voter in the electoral rolls of the respective UnionCouncil
 The term of the Local Government shall be FIVE years from the date of its first
meeting and the Mayor or Deputy Mayor may be removed from office by Two-
Third majority of the members

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A Mayor, or Deputy Mayor shall cease the office if vote of no
confidence is passed against them with two third majority.
– Shall not be movedbefore one year the date of assumption of charge.
– If unachieved, shall not be re-movedbefore one year.
Every election or removal of a member shall be notified by the
ECP.

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FUNCTIONS UNION COUNCILS
 Chief officer shall ensure coordinationbetween M.C and UC’s in the ICT.
 For U.C, the Chairman of the Union Council shall be the C.A.O.
 CAO shall assure that M.C is adhered to laws.
 The Govt. may further devolve any of its functions.
 A LG shall hold at least one meeting during a month.

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Metropolitan Corporation

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Islamabad Metropolitan Corporation

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FUNCTIONS OF METROPOLITAN CORPORATION
 Functions of Metropolitan Corporation are subject to the provisions of CDA
Ordinance 1960 and ICT Zoning Regulations 1992
 The Government may assign any of the functions, of Metropolitan Corporation,
to any authority constituted under a statute or to any public or private company
 The Deputy Mayor, and in case there are more than one Deputy Mayor, the
Deputy Mayor who is senior in age, shall perform the functions of the Mayor if
the Mayor is unable to perform his functions on account of absence or for any
other reason.

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The Mayor Shall
Presentbudgetand tax proposal
Recommend implementation way
ProvideVision and Direction
Developcriteria---KPI
Devise mechanism for accountability
Recommend Strategiesand
program to address prioritizedneed

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The Mayor Duties
Review the performance
of MC in order to
improve
Economy, effeciency and effectiveness
Efficiency of revenue collection services
Implementation of the bye-laws
Oversee formulation and execution
Of the annual development plan

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Chief officer: roles and responsibilities
 Chief Officer, appointed by Government, shall be the Principal Accounting
Officer and shall ensure adherence to all laws, rules, regulations and policies and
shall be responsible for
 Coordination
 internal audit
 human resource management
 public relations
 legal affairs
 emergency services

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Local Government Finance
 A local government shall establish a Local fund to which taxes, tolls, fees, rates,
grants by Government, rents and profits, fines/penalties and proceeds from
investments shall be credited and expenditure shall be incurred for repayment
of loan, to satisfy a judgment, for conduct of elections or any other charge as
specified shall be charged upon the local fund
 The Auditor-General shall audit the accounts of local government and the Audit
report of the Auditor-General shall be considered by the Public Accounts
Committee of the National Assembly

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Local Government Finance
 Charged expenditure.— (1) The following expenditure shall be charged
upon the Local Fund:
(a) the money required for repayment of loans;
(b) the money required to satisfy any judgment, decree or award against
the local government;
(c) the money that the local government may be required by the
Government to contribute towards the conduct of local government
elections and other deferred liabilities of the local government.

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Local Government Budget
Budget.— (1) The annual budget for a local government shall
contain estimates of:
(a) grants from the Government;
(b) amounts available in the Local Fund
(c) receipts for the next year
(d)expenditure to be incurred for the next year.
(2) The Government shall notify the provisional share
(3) The functionaries of a local government may re-appropriate
budget and revised budget shall be submitted to the local
government for approval.

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Local Government Budget
(4) A demand for a grant shall not be made except on the recommendation of the
Mayor or the Chairman.
(5) Conditional grants shown separately in the budget and shall be governed by
the conditions on which such grants were made.
(6) A local government shall prepare the budget in the prescribed manner and in
accordance with the chart of accounts notified by the Auditor-General of Pakistan.
Honoraria and allowances.— A local government may, subject to the prescribed
limitations, make budgetary provisions for honoraria and allowances of the
Mayor, Chairman, Deputy Mayor, Vice Chairman or a member of the local
government.

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Audit and LG Debts
 Audit.— The Auditor-General shall audit the accounts of a local government in
the form and manner as may be deemed appropriate.
 Local governmentdebt.— (1) A local government shall not incur any debt
without previous approval of the Government.
(2) A local government may invest surplus funds, if any, in such securities and
financial institutions, as may be approved by the Government.

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LOCAL GOVERNMENTTAXATION
 Taxes to be levied.—(1) Subject to this Act, a local government may, by
notification, levy any tax, fee, rate, rent, toll, charge or surcharge specified in
Fourth Schedule.
 A local government shall not levy a tax without previous publication of the tax
proposal and inviting and hearing public objections.
 A local government may, subject to provision of subsection (1), increase, reduce,
suspend, abolish or exempt any tax.
Property tax.— The property tax, under this Act, shall be collected by
Metropolitan Corporation.
 The Tax collected under this section shall be distributed amongst the
Metropolitan Corporation and Union Councils in such a ratio as the Government
may, by notification, specify.

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LOCAL GOVERNMENTTAXATION
Collectionof taxes.—A tax or fee levied shall be collected in the prescribed
manner.
(2) The Government may prescribe the mode of collection of a tax or a fee levied
under this Act.
(3) requested by the local government, the Government shall recover the tax, fee
or other money as arrears of land revenue.
(4) The recovery of tax, fee or other money under sub-section (3) shall not absolve
the person from prosecution of any offence under this Act or any other law.
Additional powers of the Government.— the Government may, by rules,
determine the minimum rate of a tax or fee to be levied and collected by a local
government.
(2) The Government may, exempt the levy of any tax or fee of a local government
for a specified period of not more than fifteen days on any special occasion or in
order to alleviate the specific hardship suffered by people at large or a section
of people.

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General Power of Local government
No. Responsibility No. Responsibility
1 Animal 9 DevelopmentPlanning
2 Boundaries and trees 10 Public Health and Sanitation
3 Burial Places/Graveyard and Cremation 11 Public Safety
4 Culture 12 Registrationof Births, Deaths, Marriage and
Divorce
5 Dangerous and Offensive Articlesand
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

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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 professionsand 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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Core 1st Generation Approaches to FD and ICT LG Act. 2015
Service
delivery
responsibility
• Pure Public Goods provided by national govt.
• Fiscal Decentralization and decentralization theorem
• Benefit matching and transparent delivery
• Economies of scale, financial and admin issues consider
Revenue
raising power
• Following assignment of revenue raising power show decreasing
level of LG fiscal autonomy
• SNG Sets tax rate & base
• SNG sets only tax rate
• SNG set only tax base

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Core 1st Generation Approaches to FD and ICT LG Act. 2015
Inter-
governmental
Fiscal Transfer
• Service delivery and taxing power is first level (constitutional
level) issue in 1st generation.
• Fiscal transfer is second order (or non-constitutional level) issue
• Imbalance: vertical and horizontal imbalances
• Its best tool for removing imbalances
Subnational
borrowing
• SNG borrowing is a controversial issues due to SNGs’ capacities
• investment expenditure and future generation
• Mismatch b/w revenue and expenditure prompt borrowing
• Borrowing increase accountability
• Budget constraints in borrowing

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2nd Generation Approaches to FD and ICT LG Act. 2015
Two main consideration in 2nd generation theory
i. Political process and behavior of political agent
ii. Asymmetric information and political agent
Weingast: Market Preserving federalism (competition)
Seabright: Incomplete contract (centralization more prefer)
Petchey and Levtchenkova: equalization grants are not
determined exogenously

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RELATIONS WITH GOVERNMENT
 The Government may issue directions to a local government BOUNDING the LG.
– Or direct the officer authorized to take any necessary action.
 Govt. may direct LG to collect taxes.
 Govt. to provide necessary resources to LG (budgetary provisions)for its directions.
 The Government shall appoint a LOCAL GOVERNMENT COMMISSION to
conduct inspections, inquiries, audit, resolve disputes with government,
enquire into matters referred, submit annual report on performance, take
cognizance of violation of laws/rules.
 The Commission shall be responsible to the Government

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LOCAL GOVERNMENT COMMISSION
The Commissionshall consist of:
 A Chairman, who shall be an eminent citizen of integrity and good track record or a
retired civil servant, to be appointed by the Government for a term not exceeding
FIVE years;
 two members from general public, one each nominated by the leader of the House
and leader of the Opposition in the National Assembly;
 Two eminent, qualified and experienced technocrat members selected by the
Government;
 Representative of Chief Commissioner ICT
 Director, Development & Finance, ICT.

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LOCAL GOVERNMENT BOARD
 A LG Board shall be constituted.
 Headed by a Chairman.
 Not less than 3 and not more than five members.
 All appointed by the Govt.
– It will be a corporate body.
– Power to acquire, hold and transfer property in its name.
– Chief Commissioner is Ex-officio member.
– Makes appointments, transfers, disciplinaryactions.

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DISSOLUTION OF LOCAL GOVERNMENT
 The Govt. may dissolve LG before elections or expiry of their term.
 Powers and functions being exercised by LG shall vest in Govt. (Board, funds and
properties)
 Offences have been provided in Schedules V and VI. Schedule V offences carry
imprisonment and fines as punishments while Schedule VI offences carry only fines as
punishment by issuing tickets
 In order to enforce the municipal bye-laws and other provisions of the Act, Mayor or
the Chairman, with approval of Metropolitan Corporation or Union Council respectively,
shall authorize the officials of local government as Inspectors for enforcement of
offences

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TRANSITIONAL PROVISIONS
 Except as provided by this Act, all existing by-laws, rules, regulations,
notifications or any other legal instrument shall, subject to the Act, continue in
force, so far as applicable and with the necessary adaptations, until altered,
repealedor amended by the Government
 The Government shall bring all bye-laws, rules, regulations, notifications or
any other legal instrument, issued under any law in force on the date of
commencement of this Act, in conformity with this Act within a period of two
years from the date of commencementof this Act

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MISCELLANEOUS
 Any question or doubt as to the interpretation of any provision of this Act or of any
order made thereunder shall be resolved by a decision of the President and such
decision shall be final.
 The Government or an officer designated by the Government shall, within one hundred
and eighty days of the commencement of this Act, divide rights, assets and liabilities of
the local governments or the Authority amongst the local governments and the
Government or the Authority, and the decision of the Government or of the designated
officer shall be final

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Critical Analysis
 Capacity Issues
 Political Affiliation
 Overlapping and Coordination failure
 Dependency on federal/ provincial transfer
 Capacity issues in tax collection
 Audit Issues:

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Any Question