HYDERABAD, April 6: There is confusion among district finance officials regarding the 2005-06 budget for Hyderabad and it seems that budget preparations will come to a halt in the absence of proper guidelines from the Sindh finance and cooperation department in the wake of division of the district. Inquiries by this correspondent revealed on Wednesday that there had also been no clarification regarding status of the district council which had to approve the budget and the members had to coordinate with district finance officials in budget preparation.

Given the fact that June is approaching, guidelines are required whether separate budgets will have to be prepared for the three new districts of Matiari, Tando Mohammad Khan and Tando Allahyar or the finance department of the existing district government will take care of the budgets of these districts.

The current month relates to budget preparation for the district for which one meeting has been held by the district nazim and another is scheduled on Thursday. It is expected that the meeting, if held, will now be chaired by DCO Mohammad Hussain Syed, who is in Karachi to attend a meeting supposed to take some decisions regarding financial matters of the district.

A committee, comprising district government officials, has also been formed for budget preparation.

?Budget preparations are normally finalized by May in consultation with members of the Hyderabad District Council and presented before the council in June for approval. Budgetary estimates are to be discussed by EDOs, who subsequently seek demands from their accounts officials?, said an official source.

Following division of the district, the budget process came to a standstill as to how estimates are to be collected for each group of office of the district government and who will be preparing budgets for the talukas which are now separate districts.

District government officials had collected budgetary estimates for the pre-division Hyderabad but the division of the district has changed the situation.

The source said it was not known whether expenses for the rest of three months would be given to the new districts or withheld.

?The new fiscal year is quite close whereas the local bodies? elections are also scheduled in July and August so how these things are going to be managed not only in Hyderabad but also in the new districts is not clear?, the source added.

?The district government once again faces constraints as despite a commitment by the Sindh finance department it had not sent a one-line budget of Rs3.16 billion in account-IV of the district for 2004-05?, another source said.

The source maintained that as per the finance department?s directive, a one-line budget was to be transferred in the district government?s account-IV and it was up to the district government how to utilize it but the ground reality was different.

?The Sindh government sent only non-salary expenditures in account-IV whereas funds of other heads were kept in the provincial government?s account-I, leaving no opportunity for the district government to utilise savings of these funds?, he pointed out.

He said the Sindh government would have to change the formula for distribution of funds under the Provincial Finance Commission for Hyderabad following its division.

According to the current formula, 50 per cent fund is given on the basis of population, 17.5 per cent for backwardness, 7.5 per cent for tax collection, 20 per cent for deficit transfer and 5 per cent for performance incentive. But now, Hyderabad will get cuts in the share because its area has been divided.