Denied their right: Govt uses workers’ funds to bridge widening deficit
Rs45 billion from the Workers’ Welfare Fund has been appropriated by the finance ministry.
Rs45 billion from the Workers’ Welfare Fund has been appropriated by the finance ministry. DESIGN:FAIZAN DAWOOD
ISLAMABAD:
As fiscal indiscipline continues to run rampant in the federal government, it seems that there is no level too low for the country’s money managers to stoop to. Now workers are the latest strata to be deprived of their rightful share of development funds, with over Rs45 billion of the fund allocated for welfare projects purportedly used by the finance ministry in helping bridging the yawning budget deficit.
Adding insult to that injury, the ministry has also refused to return the money, at least for the next ten years, citing a shortage of funds.
The misuse of the Workers’ Welfare Fund was brought to light here on Tuesday, when federal auditors informed the Public Accounts Committee (PAC) that the finance ministry had not been depositing workers’ welfare money in dedicated accounts. The auditors also revealed that the finance ministry had said that the money cannot be provided in the near future due to financial constraints.
The Workers’ Welfare Fund is deducted from the accounts of industrial units for developmental projects targeting the country’s human resources, and has to be deposited in a reserve fund setup for this purpose.
According to the details provided by the Accountant General of Pakistan Revenue, the finance ministry has consumed Rs44.5 billion of the Workers’ Welfare Fund, which has adversely affected welfare projects. The auditors also added that the outstanding amount may have further increased.
“The Ministry of Finance is releasing the money on its own sweet will and in piecemeal,” visibly irate Ministry of Human Resources Development Secretary Muhammad Ahsan Raja told the Public Accounts Committee. He said the finance ministry did not have any right to interfere in the workings of his ministry, and should return the money at the earliest.
A representative of the finance ministry told the Public Accounts Committee that the federal minister of finance has informed concerned authorities that the money cannot be returned before ten years. He also cited legal obstacles in transferring the money to the Ministry of Human Resources after the 18th amendment to the constitution, as earlier it had been under the domain of the Ministry of Labour and Manpower.
However, the PAC did not find his argument satisfactory. It directed the finance secretary to meet with the human resource secretary and provide a timeframe for the return of the money.
According to another official of the finance ministry, the actual amount utilised by the finance ministry has yet to be reconciled. He said the amount will fall anywhere between Rs22 billion to Rs45 billion. He, too, said there was a need to amend laws before the funds could be handed over to the Ministry of Human Resources.
However, despite the stated legal hurdles, there is no reason that can justify the use of workers’ money in bridging the budget deficit. According to the Workers Welfare Fund Ordinance, 1971, the money collected from industrial establishments is required to be deposited in the Reserve Fund and cannot be used for any other purposes.
The finance ministry’s expansionary fiscal policies have recently come under fire for putting the country’s fiscal framework in danger. As against an estimated budget deficit of Rs1.2 trillion, the International Monetary Fund has said the deficit will widen to Rs1.624 trillion by the end of the current fiscal year.
Rana Asad Amin, the spokesman for the finance ministry, was not available for comments.
Published in The Express Tribune, January 23rd, 2013.
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As fiscal indiscipline continues to run rampant in the federal government, it seems that there is no level too low for the country’s money managers to stoop to. Now workers are the latest strata to be deprived of their rightful share of development funds, with over Rs45 billion of the fund allocated for welfare projects purportedly used by the finance ministry in helping bridging the yawning budget deficit.
Adding insult to that injury, the ministry has also refused to return the money, at least for the next ten years, citing a shortage of funds.
The misuse of the Workers’ Welfare Fund was brought to light here on Tuesday, when federal auditors informed the Public Accounts Committee (PAC) that the finance ministry had not been depositing workers’ welfare money in dedicated accounts. The auditors also revealed that the finance ministry had said that the money cannot be provided in the near future due to financial constraints.
The Workers’ Welfare Fund is deducted from the accounts of industrial units for developmental projects targeting the country’s human resources, and has to be deposited in a reserve fund setup for this purpose.
According to the details provided by the Accountant General of Pakistan Revenue, the finance ministry has consumed Rs44.5 billion of the Workers’ Welfare Fund, which has adversely affected welfare projects. The auditors also added that the outstanding amount may have further increased.
“The Ministry of Finance is releasing the money on its own sweet will and in piecemeal,” visibly irate Ministry of Human Resources Development Secretary Muhammad Ahsan Raja told the Public Accounts Committee. He said the finance ministry did not have any right to interfere in the workings of his ministry, and should return the money at the earliest.
A representative of the finance ministry told the Public Accounts Committee that the federal minister of finance has informed concerned authorities that the money cannot be returned before ten years. He also cited legal obstacles in transferring the money to the Ministry of Human Resources after the 18th amendment to the constitution, as earlier it had been under the domain of the Ministry of Labour and Manpower.
However, the PAC did not find his argument satisfactory. It directed the finance secretary to meet with the human resource secretary and provide a timeframe for the return of the money.
According to another official of the finance ministry, the actual amount utilised by the finance ministry has yet to be reconciled. He said the amount will fall anywhere between Rs22 billion to Rs45 billion. He, too, said there was a need to amend laws before the funds could be handed over to the Ministry of Human Resources.
However, despite the stated legal hurdles, there is no reason that can justify the use of workers’ money in bridging the budget deficit. According to the Workers Welfare Fund Ordinance, 1971, the money collected from industrial establishments is required to be deposited in the Reserve Fund and cannot be used for any other purposes.
The finance ministry’s expansionary fiscal policies have recently come under fire for putting the country’s fiscal framework in danger. As against an estimated budget deficit of Rs1.2 trillion, the International Monetary Fund has said the deficit will widen to Rs1.624 trillion by the end of the current fiscal year.
Rana Asad Amin, the spokesman for the finance ministry, was not available for comments.
Published in The Express Tribune, January 23rd, 2013.
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