Financial Autonomy and Central-local relationship at Union Parishad

Level in Bangladesh

Index

Introduction

PART – A

Union Parishad administration system in Bangladesh Financial Administration

Income Expenses Budgeting and financial autonomy

Relationship between central govt. and Union Parishad

Peoples Participation at union level

PART – B

About Gundhar Union

Financial Administration of Gundhar Union Sources of income Fields of Expenses Budget Financial autonomy

Relationship with central govt.

People’s participation in union activities

Conclusion

References

Introduction

The origin of the root level local government bears a long history in this subcontinent. The existence of village councilors can be traced out from Kautillya’s Arthashastra during Mauriyan dynasty . The foundation of modern Union Parishad system laid by Lord Roppon through Rppons resolution (1882) . It was further modified through various Acts and ordinances during British and Pakistan period . Existing union parishad structure in Bangladesh brought to light through the Local Government Ordinance ( Union ) ,1983 .

It is Union Parishad that is the grass root level administrative organ of the government in Bangladesh . It is known fact that the local body like union parishad should have autonomy in both financial and administrative decision making . But in fact , in Bangladesh, this important tier of local government is highly dominated and controlled by the central government .

As a part of academic curriculum ( PA -211 , Local Government ), I had assigned to do a field work on financial autonomy , central-local relationship at union level by our course teacher Dr. Ferdous Arfina Osman . The findings of my field work are discussed in this assignment .

Union parishad administration system in Bangladesh

The Local Government ( Union Parishad) Ordinance , 1983 which further modified in July 2003 provides that the union parishad shall consist of a chairman, nine members from nine respective wards of a union and three exclusively reserved seats for women. All chairmen, ward members and women members shall be elected by direct election on the basis of adult franchise. The tenure of an elected union parishad body shall be 5 years. A good number of functions (almost thirty-eight) were vested on union parishad including civic and public welfare, village police and civil defense, revenue and general administration, development and judiciary etc.

Financial administrationThe clear picture of financial administration of the union parishad can be brought out through over viewing the following things.

* Income * Expenditure

* Budgeting

Income of the union parishad : The union parishad fund is accumulated from flowing sources:

1. Tax revenue 2. Non-tax revenue 3. Govt. grants 4. Local trust fund

Fig : Income Sources of Union Parishad

1. Tax revenue: Local Government Ordinance 1976 defined 28 sectors for levying taxes. But in practice have only 5 or 6 sectors from where union parishad levies taxes. These are: Immoveable properties (Holding tax) Professions like-trades Cess tax Amusement tax e.g. jatra, mela. Hat and bazaars Tax on vehicles

2. Non-tax revenue: Different rents and charges are non-tax income sources of UP. Different fee’s, tolls, certificate fee’s, license fee’s, infrastructure rent profits etc are non-tax revenue of union parishad.

3. govt. grants : Govt. provides three types of grants to union parishad. (i) Specific or development grants (ii)General purpose or budget deficit grants and (iii)Percentage or compensatory grants.

Tax Revenue

Income of Union Parishad

Non-Tax Revenue Local Trust FundGovt. Grants

Development Grants

Budget deficit grants

Compensatory

For specific development programs like rural work program, food for work program, relief program etc. government provides grants to union parishad.

Govt. gives about 2 lacks taka annually as block grant to union parishad for development activities.

Union parishad receives percentage grants to pay salary of its staffs and officials. Govt. provides 50% of the salary of the chairmen, members and village police and 75% of the secretary.

4. Local trust fund: Trust funds are established through co-operative process. Rich and merchants living within a certain union parishad often donates in this fund.

Expenditure: The main field of expenses of union parishad is the salaries of union parishad employees and allowances of elected representatives. Expenditure of the union parishad can be categorized into three types:

1. Establishment or current expenditure2. Development and maintenance expenditure 3. Miscellaneous expenditure

Fig : Fields of Expenditure of Union Parishad

1. Establishment or current expenditure : Expenditure on salaries of union parishad employment, the conduct of elections, auditing accents, judgment decrees etc. It covers about 60%-65% of the total income of the union parishad.

2. Development and maintenance expenditure : construction and maintenance of irrigation works, embankments and canals, roads, bridges and culverts, public buildings (e.g. mosques, offices etc), haats and bazaars etc are the development and maintenance expenditure sectors of the union parishad.

Establishment or current exp

Expenditure of Union Parishad

Development and maintenance exp

Miscellaneous exp

3. Miscellaneous expenditure : The training of Chaukidars and Dafadars, return of security deposits of tax collectors, family planning, adult education, cottage industry, public health and sanitation etc refers to the miscellaneous expenditure field of the union parishad.

Budgeting and financial autonomy : There hardly have autonomy of the union parishad to makes its financial decision independently.

After preparing the budget, it has to be sent to the UNO who check and scrutinize (if he feels it is necessary) and sent it to DC who also check, scrutinize and approve it. Finally the budget is sent for audit to CAG (Comptroller and Auditor General) office. The audit report is then submitted to the deputy director of local government office who send it to DC office and LGRD ministry. Through this complex approval process, the budgeting autonomy of union parishad remains dreams and control over the union parishad remains at the hand of the central govt.

There have also some other mechanism of the central government to control over the union parishads.

In case of maintenance of the accounts of the union parishad, joint account in the name of UNO and Thana Chief Engineer is used for transaction of the union parishad, Money is allocated by the UNO and union parishad only prepare a scheme to spend it. Moreover, authority of sanctioning money goes to the UNO and the amount also determined by him.

Central govt. also controls union parishad finance by delaying to reach the grants-in aid or block allocation at the hand of union parishad authorities.

A certain percentage of taxes and incomes of the union parishad also go to the treasury of the central government.

Relationship between Union Parishad and central government :

Union parishad authorities only have the powers those given to them by the central govt. through legislation. They exercise limited powers. Central govt. controls the union in 4 ways. These are

1. Legal control2. Non-legal control3. Functional control4. Financial control

Fig : Relationship between Central Govt. and Union Parishad

1. Legal control: The legislature generates the structure, composition and determines the functions of the union parishad and thus they central govt. controls the union parishad by formulating acts and ordinances.

2. Non-legal control: central body controls the union and it’s functions by issuing various circulars from time to time. Haat bazaars were under control of the union previously but now income from Haat Bazaars exceeding tk 5000 have to be given to the upazila which is another way of control.

3. Functional control: central govt. determines the functions of the union parishad and its functionaries. The duties and responsibilities of the officials and representatives of the union parishad. Authority of the UNO and DC over the union parishad also a process of controlling by the central govt.

4. Financial control: As it is mentioned previously in this assignment that the annual budget of the union parishad is scrutinized by the UNO and DC. Account of the union parishad and money allocation is determined by the UNO. Late grant allocation and percentage of union parishad taxes are the process of financial control over the union parishad by the central govt.

Peoples participation at Union Parishad level

The avenues of people’s participation at union level are:

Election and Voting Practice :People determine their representatives (i.e. the chairman, members and women members) through voting practice in the elections.

Sub-committees and standing committees : Union parishad ensures peoples participation during meetings of different sub-committees formed by the union

Central Govt.

Financial Control

Functional Control

Non-legal Control

Legal Control

parishad for various purposes. Influential local people of different sections of that particular unions participate in these committees.

Project committee : Project committee is chaired either by the chairmen of the union parishad or the member of respective ward 2 other members who will be from among the general people of that locality.

Indirect Participation : Linkage between the union parishad and development agencies and NGO’s also ensures the indirect people’s participation as the representatives of the union parishad know better about the needs and demands of the people of that area.

Budgeting : While union parishad prepares it’s budget it should take inputs from local people.

Village court : Village court ensures people’s participation at union level as it’s a three members committee. The court is headed over by the chairmen with two other members, one is respective ward member and another is a chosen person of the victim from his committee.

About Gundhar Union Parishad

Gundhr Union Parishad lies on the Haur basin of Karimganj upazila in Kishoregonj district. It is covering a total area of 10.32 sq kilometers with a total population of approximately 40 thousand . There are 18 villages in this union parishad are Majority of them are Muslims and rest are Hindu. There have 2 high schools , 2 madrashas ( One for male and other for female students ) , 5 primary schools among which 2 private kindergarten schools . There are about 10 mosques and 2 temples. Both road and water are the sources of communication here . This union harvest surplus than it’s demand . Rice , jute and vegetables are mainly grown here . Like other union parishads in Bangladesh this union parishad is composed of 9 ward members , 3 women members headed by a chairman . Md. Zahidul Islam is the chairman of Gundhar union parishad .

Financial administration of Gundhar union parishad :To learn about the income and expenditure of this union , I spoke with the chairman , 2 ward members and with the secretary of the union . As per their information , financial administration of Gundhar Union described below :

Income of Gundhar union :

Union parishad fund raised combining the taxes it collects , rents and fees it gathers , voluntary contribution of the rich families in its area and government grant. The sources and rates of income as per below mentioned rate :

Tax rates on immoveable property Tax rates on the value of dwelling house Tax on professions

trade,service other livelihood

Tax on local transport except motor vehicle Amusement tax

JatraMela

FeesBirth and death registration and certificate feesLicense and permit issuance fees by union ParishadLicense and permit issuance fees by union ParishadHat and market places

Union parishad appoint a tax collector who collect taxes from above sources .

Besides above sources , there are 5 donors in this union parishad who donate a handsome amount in union parishad fund for development activities . It also collects special donations for people of this union for urgent development and disaster management activities of the union . Govt. provides tk 2 lacs annually for development activities and more 2 lacs for payment of staffs and remuneration of the Chairman and members .

Expenditure : Union Parishad spends most of it income for paying wages of it’s stuffs and honorary of the Chairman and members , purchase of office equipment, furniture, supplies etc.. Some other major fields of expenses are :

Office set-up/ repair Expenses for tax collection Meeting expenses Transportation expenses Health, sanitation and sewerage Agricultural development Road, construction /repair House, construction /repair Education

Tree plantation Cultural and amusement expenses Disaster management expenses .

All expenses are conducted through union parishad account .

Annual Budget : What chairman and member informed me pertaining to the budget preparation of the union is that hardly they have chance to prepare their budget by themselves rather it is automatically vested on them by the DC ( Deputy commissioner ) :

The summary of the estimated budget of Gundhar union parishad for 2010-2011 fiscal year attached here .

Estimated budget of income of Gundhar Union parishad for the FY 2010-2011

Sources of income Amount (tk)Tax on land property 50,000.00Tax rates on the value of dwelling house 50,000.00Tax on trade, professions and other livelihood 1,00,000.00Tax on local transport except motor vehicle 30,000.003.Amusement tax: jatra, mela

20,000.00

Fees : Birth and death registration and certificate fees License and permit issuance fees by union parishad Hat and market places Ferry ghat

75,000.00

Government allocation: Specific grants General purpose / grants and Percentage / grants.

( 2,00,000.00 +2,00,000.00 ) = 4,00,000.00

Local trust fund 1,50,000.00Other incomes 1.00.000.00 Total = 9,75,000.00

Estimated budget of expenditure of Gundhar Union parishad for the FY 2010-2011

Financial autonomy :

The union parishad hardly can take their economic decisions independently and enjoy no autonomy regarding economic expenses . Budget is scrutinized and even often prepared by the DC or the UNO . Local MP advises , supervises and sometimes controls the mode of development expenses . Local leaders also create pressure to take decision in favor of their political party . Local donors also interrupt the autonomy of the union parishad . As the chairman is BNP supported , the UP often don’t get the govt. grants in due time .

Relationship with central government :

Field of expenditure Amount (tk)Administrative expenses: Remuneration for chairman and members Salary and remuneration for the secretary and other staff

4,50,000.00

Official Expences: Electric bill Transportation expenses Meeting expenses Expenses for tax collection Election expenses Office set-up/ repair Others

1,50,000.00

Annual Development Expenses (ADP) Agriculture Health, sanitation and sewerage Road, construction /repair House, construction /repair Education

2,75,000.00

Miscellaneous expenses : Printing charges Disaster management Audit expenses

50,000.00

Others: 50,000.00Total = 9,75,000.00

Relationship between Union Parishad and central govt. can be viewed in various aspects as follows :

Relationship with local MP : Local MP straightly influence all development , administrative and economic decisions of the Union parishad . Even he indicates the sectors of expenses of the govt. grants allocated for the union parishad .

Relationship with other local politicians : Local politicians pressurize the union parishad body for protecting their political and self interests .

Relationship with LGRD ministry : There is no direct access of Union parishad body to the LGRD ministry . They have to communicate with the ministry either through local MP , political leader or through UNO , DC .

Relationship with DC and UNO : UNO directly supervise the union for it’s functioning ,planning and implementing decisions . He also sometimes scrutinize the annual budget of the union . While DC finalize the budget and enjoy all authorities of dissolving the union parishad committee whenever he do wish .

Peoples participation :

Voting : People of the union parishad can participate in decision making process through providing their opinion during election on adult franchise basis .

Co-opted membership of standing committees : For various standing committees formed by the union parishad, the educated and aged people of the locality become the co-opted members .

Local judiciary system : Juries of local Darbar and village court are selected from among peoples of the locality headed over by the chairman .

Development activities : For some special voluntary development activities rune by the union , local young men participate .

Disaster management activities : After any calamity all people of the union work to re-cover and develop the victimized areas along with the parishad .

Jatra , fair and mela : Various programs arranged by the union ensures peoples participation .

Meetings : During some important meeting of the union , local people are asked to remain present .

Conclusion :

Although it is declared in the constitution of the people republic of Bangladesh ( article 59 ) that there shall be elected , independent local bodies . And theoretically we know that local bodies must have taxation power . Local govt. Ordinance 1983 indicated 28 sectors from where union parishad can collect tax but it is actually remains in black and white . In practice , there is no autonomy budgeting , financial decision making and it can collect tax only from 6 sources .

In this field work I also found that union parishad is highly controlled by the central govt. in various ways .

Unless union parishad get financial autonomy and decentralized authority , it’s not possible to get the sweet fruit of the union parishad administration in Bangladesh .

References and acknowledgements :

.

1 Rural development in Bangladesh – Problems and prospects By-Dr. Mohammad Mohiuddin Abdullah

2 Local government in Bangladesh-Revised third edition By – Kamal Siddique

3 Md. Zahidul Islam , Chairman , Gundhar Union Parishad .4 Lokkon Uddin , member , Gundhar union parishad .5 All staffs of Gundhar union parishad .