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Long Report of GP Fund

Long Report of GP Fund

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Published by Asad Mazhar

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Published by: Asad Mazhar on Dec 05, 2010
Copyright:Attribution Non-commercial

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12/04/2011

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INTRODUCTION
According to the Provident Fund Act 1925, and the Central Government (ClassIV Servants) Provident Fund Rules, 1966, it is mandatory for all GovernmentServants to make share for General Provident Fund (GPF) from their salary onmonthly basis. This deduction is based upon the rates fixed by the Governmentin different times. At this time, all receipts and disbursements of GPF are bookedin the Public Account of the Province. The net savings of the Fund (receiptsminus disbursements) are, however, not invested to cope with increasing liabilityon the provincial budget. Presently, the accumulated accruals, which are Rs.32,956.063 million during the CFY 2007-08.The Government of Sindh has nocomprehensive investment plan for meeting future liabilities like GeneralProvident Fund and other pension schemes. The amount, which is deductedfrom employee’s monthly salaries, is being utilized by the Government of Sindh.The liabilities are therefore further increasing which must be taken care of duringthis period of self-sufficiency and increasing cash inflows. Under suchcircumstances, the Sindh General Provident Investment Fund (SGPIF) wasestablished with effect from 01-07-2007, on the pattern of Sindh Pension Fund,with seed money of Rs.2.0 billion which now reached to Rs 4 billion up to 2008-09. Investment in SGPIF is to be increased gradually to the tune of Rs 2 billion toa level when the government could meet its annual GPF liabilities. Sindh GeneralProvident Investment Fund Act 2008 has been promulgated
 
in this regard. Onthe pattern of GP Fund Sindh Government has established Sindh Social Relief Fund (SSRF) which was established with seed money of Rs 3 billion in FY 2005-06 with an announcement of Rs 3 billion annually with a broad objective of moving towards direct intervention of providing relief to the vulnerable anddisadvantaged people (Ordinance, 2007). At present total available fund is11.622(Approx :) billion up to June, 2008.
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 YearOpeningBalanceReleasesduring theyearProfitduring th YearCumulativ Total (Endthe Year)
2005-06 0 3,000 3,002006-07 3,000 3,000 183 6,182007-08 6,183 3,000 784 9,962008-09* 9,967 2,000 1,232 13,19
Grand Total11,0002,19913,19
Table 8.3
Sindh Social Relief Fund
Rs. in Million
(Finance Department, Budget Analysis Book, 2008-09 Government of Sindh)This study covers two monetary areas of Sindh Government i.e. Sindh GeneralProvident Fund (SGPIF) and Sindh Social Relief Fund (SSRF).Here, it will bemainly attempted to understand the benefits which can be accrued after theprocess of investment of following two resources of Sindh Province, i.e.:General Provident Fund Investment Fund (SGPIF).Sindh Social Relief Fund (SSRF).The Government of Sindh is undertaking various reforms to enhance its servicesto its employees and the residents of the province at large. One such importantinitiative is the establishment of GP Fund and Sindh Social Relief Fund (SSRF)Reforms. Being the largest employer in the province, the responsibility of thewelfare of its employees is immense. There are presently more than 400,000people on the payroll of the provincial government. Currently, budgetaryallocations are made every year to meet the pension and GPF liabilities. Thegovernment started an independent GP Fund in 2007. As of today, the Fundstands at Rs 4.479 billion and Sindh Social Relief Fund at 13.19 billion (BudgetAnalysis Book 2008-09).The provincial governments are vital components in the public finance structureof Pakistan. Given the constitutional allocation of functions, they are responsiblefor delivery of basic services like Irrigation, Agriculture Extension, distribution of Agricultural Inputs, Education, Health, Road transport, etc. Traditionally,recurring expenditures on Provincial services have been financed by own-tax andnon tax revenues and by transfers from the federal pool of taxes. As per law, the
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