Misuse of Workers Welfare Fund and Devolution - May 10, 2011

Large amounts of Workers Welfare Fund (WWF), created under Workers Welfare Fund Ordinance of 1971, are being misused by Government to finance budget deficits as well as placement of political advertisements in newspapers.

Large amounts of Workers Welfare Fund (WWF), created under Workers Welfare Fund Ordinance of 1971, are being misused by Government to finance budget deficits as well as placement of political advertisements in newspapers, which apparently has no connection with the sanctioned activities of WWF. Government has withheld 70% (PKR 87.5 billion) of total PKR 126.8 billion funds for budget financing this year.

In accordance with section 4 of the Ordinance, every establishment earning more than PKR100, 000 per year is obliged to make a contribution of 2% of its total assessable income. In accordance with section 6 of the ordinance, Government is required to spend money of this fund for establishment of housing estates or construction of houses for the workers, educational facilities and scholarships to workers’ children, death grants and marriage grants for daughters of industrial workers.

However, WWF is not only investing workers’ hard earned money in non-governmental securities; it also gave a donation of PKR 1 billion to the Prime Minister Flood Relief Fund last year, which is against WWF Rules.

After the 18th Constitutional Amendment, WWF is also to be devolved by June 30, 2011 along with other attached departments of the Ministry of Labour. However, it is apprehended that Khyber Pakhtunkhwa and Balochistan would not be able to fund their current projects in case of devolution as most of the funds come from Sindh or Punjab. After devolution, the only beneficiary will be the Sindh province as most of companies have their head offices in Sindh Provinces, from where they pay their contribution to WWF.

Source:

Tribune May 10, 2011 - "Unlawful act: Govt uses worker funds for ‘budget financing"

Dawn May 10, 2011 - Welfare fund used to ease budget deficit

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