Public Policy and Administration Research www.iiste.org ISSN 2224-5731(Paper) ISSN 2225-0972(Online) Vol.3, No.7, 2013 62 Poverty and Social Impact Analysis of Workers Welfare Fund Vaqar Ahmed Muhammad Zeshan* Muhammad Abdul Wahab Sustainable Development Policy Institute, Pakistan * E-mail of the corresponding author: zeshan@sdpi.org, muh.zeshan@gmail.com We would like to acknowledge the financial support by Government of Khyber Pakhtunkhwa and technical advice by two internal referees. Abstract This study conducts the poverty and social impact analysis of the workers welfare fund (WWF) program across Pakistan. It finds that colossal documentation, delayed free disbursement, and distance of school from home are the main hurdles in the way of education. New housing schemes are moving at a slower pace with compromised quality, and repair work is not being done on a regular basis. Sanitation and sewerage issues in labour colonies are creating health and environmental hazard. Discrimination in health care facilities and rent-seeking is very obvious. There is a detailed process review of WWF that borrows advice from such programs in other parts of the world. It is important to note that after the 18th constitutional amendment, labour market reforms are now responsibilities of provincial governments. However we explain that such a transition is painstakingly slow. Keywords: Education, Conditional cash transfers, Gender balance 1. Introduction Government of Pakistan (GOP) has been facing challenges to ensure the workers' welfare across the industrial entities. While it has not been able to fully implement the macro-level labour reforms (e.g. the implementation of minimum wage – revised annually) however it is striving to put in place social safety nets such as Benazir Income Support Programmes. Within the overall ambit of social protection, the government has retained the Workers Welfare Fund (WWF) organization even after the 18 th Constitutional Amendment which requires social sector programmes to be devolved to provinces in order to improve service delivery at the provincial and sub- provincial levels. The provincial governments have however been urging the federal government to hand over the reins of WWF. The WWF is providing assistance to industrial labour via specific instruments discussed latter. The WWF is an autonomous body that is administered by the newly established Ministry of Human Resource Development (HRD). A tripartite forum runs WWF including government officials, employers and industrial workers. WWF was launched in 1971 under Workers Welfare Ordinance (WWO). Its objectives include the provision of the various schemes that could promote the workers welfare such as residential schemes, education, health care, marriage and death grants. The Finance Acts 2006 and 2008 administer the firms operating under the Shops and Establishments Ordinance 1968 that each firm, earning an annual income more than Rs. 500,000 in a year, is bound to pay 2% of its total income assessable under law. This assessment should be in compliance with the tax returns that are submitted to Federal Board of Revenue or tax departments at the sub-national level. Further the WWF makes investments in real estate, government guarantees such as state bank securities and national defense schemes, government bonds, non-government securities, and foreign direct investment. Secretary WWF from the investment committee manages these investments. The resulting profit is added to WWF’s kitty which is ultimately used for labour welfare activities. In the last 10 months of 2012, Rs. 2500 million has been provided financing 46 housing schemes benefiting 15000 families. Further Rs. 77 million has been provided for educational scholarships that accommodated 1456 students. 1 An amount of Rs. 637 million has been disbursed for marriage grants accommodating 9138 families. Around 1079 households are facilitated with death grants and the WWF provided a sum of Rs. 341 million. After the May 2012, the WWF increased the amount of marriage grant from Rs. 70,000 to Rs. 100,000. Any worker can avail the funds for his daughters and there is no bound on their number. Female workers can also avail this grant for their own marriages but once in life. The law provides equal opportunity to all the pay scales given the workers are registered with Employees Old Age Benefit Institution (EOBI) and other Social Security Institutions. The WWF also accommodates the industrial workers in case of a severe mishap. It provides a death grant of Rs. 500,000 which was Rs. 300,000 previously. To avail this facility, a worker is required to register with EOBI Social Security Institution except the mine workers. The following flow chart (1) indicates the overtime evolution in the operations of WWF. 1 Ministry of Human Resource Development, Government of Pakistan, 2012.