Distribution of WWF, EOBI assets to delay devolution

Shifting of ministry to provinces likely to be delayed till June.

LAHORE:

The devolution of the Ministry of Labour and Manpower under the 18th Amendment is expected to be delayed as federal and provincial governments differ over distribution of assets owned by the Worker Welfare Fund (WWF) and the Employees Old-Age Benefits Institution (EOBI), The Express Tribune has leant.

Financial deposits of WWF were calculated at Rs81 billion, while EOBI had assets worth Rs148 billion. These two institutions come under the labour ministry.

The transfer of Ministry of Labour and Manpower to the provinces is scheduled to take place by the end of March, but the issue is likely to drag on till June. Under the 18th Amendment, the federal government has to devolve 18 ministries with 47 subjects to provincial governments, including the Ministry of Labour and Manpower. Subjects such as labour welfare, provident funds, health insurance and old-age pensions are scheduled to be shifted to all provinces by June this year.

WWF provides grants to worker welfare boards, constituted in each province, to execute welfare projects. The Federal Board of Revenue (FBR) annually deducts two per cent of total income of all registered industrial units, whose income exceeds Rs500,000 and is placed at the disposal of WWF for utilisation.

Similarly, FBR collects five per cent worker wages in an industry, to be paid by the employer, and one per cent of the wages, to be paid by the worker, and places the funds at the disposal of EOBI. EOBI then utilises these funds for payments such as old-age pension, old-age grant and invalidity pension.

Since the adoption of 18th Amendment, discussions have been under way to decide on the devolution of organisational structure of WWF and EOBI, with allocation of their human resource and funds to provinces, along with distribution of existing assets.

As discussions were taking place over distribution of moveable and immovable assets, the Punjab government advocated distribution using the National Finance Commission (NFC) formula, which based the process on the number of registered industrial units and workers. Up to 10,831 industrial units with 676,755 registered workers are operating in Punjab.

On the other hand, the Sindh government is pleading for distribution to be based on source of collection and deduction of welfare fund and pension, as head offices of most of the industrial units, registered under the two organisations – WWF and EOBI, are working in Karachi. However, Khyber-Pakhtunkhwa and Balochistan governments have proposed to continue the use of the existing formula, under which both provinces are receiving comparatively higher funds.

Published in The Express Tribune, March 25^th, 2011.