KARACHI, Aug 21: The Sindh governor has approved the payment of pension dues of retired employees of local councils as on 31/12/2001 by the provincial government, as a one time grant in view of the poor financial position of the newly established local governments.
He approved a summary moved by the local government department which suggested that these pension dues be paid through the respective DCOs after verification of claims by audit. The entire amount of Rs145.389 million will be adjusted out of the 2.5 per cent GST share of the local councils/district government.
The governor accepted a proposal and directed the establishment of a pension fund by local government for the employees of local councils.
A pension fund of Rs one billion has already been established for government employees.
Out of the proceeds of OZT grants, initially, an amount of Rs10 million per month may be diverted out of monthly releases of 2.5pc of GST for the proposed pension fund, which will facilitate the local government department to fulfil the needs of retired employees of local councils.
Even prior to the inception of the devolution plan, almost all the local councils were facing financial crisis, and were not able to pay the salaries to their staff and clear the liabilities of outstanding dues of pension/gratuity of retired employees.
This dismal state of financial affairs was owing to the lack of coordination between the administration of local councils and general public, as a consequence of which the local councils could not revise/impose, their taxation schedules in time.
Besides, the Octroi and Zila Tax (OZT) of local councils — which remained the mainstay of the income sources of the councils — was abolished by the government in 1998.
In lieu of the abolished OZT, the government commenced to compensate the local councils through OZT share/grant. But this grant was never released equal to the amount/share due to each local council of Sindh. Conversely, the share was gradually decreased to the extent that now it is almost 25.12 per cent lower then the amount due.
These steps proved detrimental to the fiscal health of local councils, and the councils ran into hefty liabilities i.e. salary dues and outstanding arrears of pension/gratuity.
For the sake of providing relief to retired employees of local councils, the provincial government, in 2001, decided to release an amount of Rs2,295,197 so that the claims of pension/gratuity of the retired employees could be met.—APP
