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 . 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, I was assigned to conduct a field work on financial autonomy , central-local relationship at union level in Bangladesh . The findings of my field work are discussed in this assignment .

1. Financial Autonomy and Central-
local relationship at Union Parishad
Level in Bangladesh

2. 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

3. 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 administration
The clear picture of financial administration of the union parishad can be brought out
through over viewing the following things.
* Income
* Expenditure
* Budgeting

4. 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 RevenueTax Revenue
Income of Union
Parishad
Income of Union
Parishad
Non-Tax RevenueNon-Tax Revenue
Local Trust FundLocal Trust FundGovt. GrantsGovt. Grants
Development
Grants
Development
Grants
Budget deficit
grants
Budget deficit
grants
CompensatoryCompensatory

5. 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 expenditure
2. 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,
Establishment or
current exp
Establishment or
current exp
Expenditure of
Union Parishad
Expenditure of
Union Parishad
Development and
maintenance exp
Development and
maintenance exp
Miscellaneous
exp
Miscellaneous
exp

6. public buildings (e.g. mosques, offices etc), haats and bazaars etc are the
development and maintenance expenditure sectors of the union parishad.
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
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 control
2. Non-legal control
3. Functional control
4. Financial control

7. 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

8. 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 :

9. 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
Jatra
Mela
• Fees
Birth and death registration and certificate fees
License and permit issuance fees by union Parishad
License and permit issuance fees by union Parishad
Hat 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

10. • 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 50,000.00
Tax rates on the value of dwelling house 50,000.00
Tax on trade, professions and other livelihood 1,00,000.00
Tax on local transport except motor vehicle 30,000.00
3.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 1,50,000.00
Other incomes 1.00.000.00
Total = 9,75,000.00

11. Estimated budget of expenditure of Gundhar Union parishad for the FY 2010-2011
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: 50,000.00
Total = 9,75,000.00

12. 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 :
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

13. 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 .

14. 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 .