ISLAMABAD, May 9: The government has withheld Rs87.5 billion of the Workers' Welfare Fund (WWF) to meet its deficit before the announcement of the next year's budget.

The Public Accounts Committee (PAC) of the National Assembly was informed on Monday that the government had withheld 70 per cent of the WWF funds amounting to Rs126.8 billion, leaving 30 per cent of the amount for welfare projects for industrial workers.

Giving a presentation to the PAC, WWF Secretary Ijaz Jaffer said the government was using the money for budget financing.

The Worker Welfare Fund Ordinance was promulgated in 1971 to provide residential and educational facilities to industrial workers and their children and take measures for their welfare.

The secretary said the government was not paying interest on the withheld amount which was hampering WWF's projects.

A donation amounting to Rs1 billion by the WWF to the prime minister's flood relief fund was also discussed at the meeting presided over by Yasmin Rehman of the PPP. It was observed that the transaction was against the WWF rules.

Auditor General Tanvir Ali Agha said transferring funds from one public entity to the other was merely circulation of money which made no sense. The official said the decision had been taken by the board of directors.

The PAC was informed that WWF's money was also being used to place government advertisements in newspapers which had no relevance to the fund's activities. Audit officials said misuse of funds on this account would be covered in the report for the current financial year.

Under the 18th Amendment, the WWF will be devolved to the provinces. However, the secretary said, Balochistan and Khyber Pakthunkhwa were not in favour of devolution.

The major contribution to the WWF comes from Sindh, particularly Karachi.

After devolution, the provinces will have to finance the projects currently being executed from a consolidated fund. Five schemes involving an estimated cost of Rs937 million are under way in Balochistan and two projects worth Rs103 million in Khyber Pakhtunkhwa.