HYDERABAD, March 29 Sindh Finance Department's refusal to honour a commitment made by the president and release funds with 10 per cent increase for Hyderabad has put on hold health and education schemes and led to severe financial problems, according to sources in the district's finance department.

District Nazim Kanwar Naveed Jamil urged the president in a letter to help release funds he had committed after Sindh Chief Minister Syed Qaim Ali Shah in a statement on March 25 expressed inability to release budgetary allocations with 10 per cent raise. He had though admitted that the president did ask for release of funds.

The chief minister said “There are some legal hitches if we release funds with 10 per cent enhancement.”

The refusal has taken the district government's finance department officials by surprise. They believe that Hyderabad, being the second largest city and one time capital of Sindh, is being discriminated against when they compare figures of other districts who have received funds with raise in percentage by the finance department.

Sources in the district's finance department claimed that the district government received Rs3,203.942 million for 2008-09. “Though it is indicative of a raise of just 4.53 per cent but actually we are seeing that percentage of releases is at the rate of just 3.5 per cent in the single line budget,” said an official.

He said that the district was released Rs3,064.971 million in 2007-08. Comparatively, Matiari district received a raise of 51.133 per cent, followed by Shikarpur's 34.429 per cent and Dadu's 29.620 per cent, he said.

Moreover, the federal government's raise of 20 per cent in salaries of employees for the ongoing fiscal year is bound to have a serious impact on the budgetary allocations for development sector.

The 100 per cent price-hike estimated by the district government officials together with the raise in salaries swallowed a big chunk of the budget, he said.

“If we look at last fiscal year's transfers the 3.5 per cent raise in the budget in fact means 40 per cent cut,” said the official. That was why, he said, the district nazim was persuaded to take up the issue with the chief minister, he said.

The sources in the finance department pointed out that in the first month of current fiscal year Sindh government deducted Rs4 million and by December last Rs24 million from fund releases foe the district government.

In January and February 2009, Rs29 million were deducted while in the current month of March Rs71 million were deducted from the single line transfers, said the sources.

“It indicates that so far Rs124 million have been withheld by the finance department for unspecified reasons,” said the official.

In addition, he said, in the last quarter of 2007-08, Rs250 million had been deducted but when the matter was taken up with Sindh finance officials they had to release Rs90 million.

The district government officials who calculated a 40 per cent deficit in current fiscal year's releases of funds believe that annual development sector has received a severe blow.

The financial crunch has affected trauma centre scheme and eight new hospitals. “Cardiac ward of Qasimabad taluka hospital and kidney ward in Bhittai hospital Latifabad will not function unless machinery is bought for them,” said a source.

He said that construction of toilets, laboratories and boundary walls of schools as well as streets and roads would be doldrums.

District Nazim Kanwar Naveed Jamil was surprised to hear chief minister's statement. He said “It's unbelievable for me. When the president's commitment is not given effect despite the fact that he is also co-chairman of the PPP which is ruling Sindh who else will be given any weight by Sindh government.”

He urged the president to intervene in the matter and help release funds because the fiscal year was nearing its end. “I have written a letter to the president, requesting him to intervene,” he said.

He said that the president had promised to ensure release of 10 per cent enhanced funds in September 2008 in the presence of the prime minister, federal ministers, Sindh governor and chief minister.

Perhaps the finance department was bent upon misguiding the chief minister. “I think the Provincial Finance Commission lays down clear guidelines for fund releases for the districts. So there is violation of legal provisions as far as PFC guidelines are concerned.

There are no legal hitches involved in release of 10 per cent enhanced funds as hinted by the chief minister,” he stressed.