PESHAWAR, July 26: Financial crisis is hampering expansion of NWFP government pension fund, which was established some five to six years back to cater to the needs of the growing annual pension bill of the province, according to sources.

Initially, said the sources, a small amount was deposited under the fund with an aim to increase its size every year bringing it at a level where the growing requirements of the annual pension bill could be met by utilizing the interest over and above the pension fund.

“The consistent financial squeeze did not allow any of the successive governments to invest in the pension fund hence its size could not get expanded,” said the official sources.

During the last 12 years the NWFP government’s pension bill registered growth at an alarmingly high rate of over 671 per cent, and it is apprehended that it would register phenomenal increase during the next 10 years.

NWFP’s annual pension bill stood at Rs466.5m in the 1990-91 financial year. Whereas, for the 2002-03 financial year a colossal amount of Rs3.6bn has been specified for the pension bill.

According to the sources, the provincial government’s annual pension bill is bound to increase manifold in the not-far-away future and it may need over Rs10bn annually only to cater to its pension bill after 10 years.

The situation would become much more alarming once the employees employed since 1988-89 start getting retired after 15 years or more, from now onward.

The establishment size in NWFP swelled from 177,106 in 1988-89 to 282,809 in the 2000-01 financial year recording an increase of 61 per cent in a period of 10 years.

The Rs3.6bn amount specified under the head of pension makes 7.7 per cent of the Rs46.7bn total revenue receipts the NWFP government has projected for the 2002-03 financial year.

Whereas, it is 9.8 per cent of the over Rs36.7bn revenue receipts the province is likely to end up with at the close of the 2002-03 financial year - due to Rs9.9bn expected shortfall the provincial government has reflected under the head of net hydel profit in its next financial year’s budget.

The provincial government’s cost of establishment is eating up almost 50 per cent of the total annual revenue receipts of the province on account of salary, pension and gratuity fund.

According to the sources, presently there would hardly be Rs2bn to Rs3bn in the pension fund and, at least, for the last four or five years its size has not been expanded due to paucity of funds faced by the successive provincial governments.