Welfare Society
The fundamental principles of Islam requires that the State looks after the welfare of its citizens, all of whom are equal before the law, there being supposedly no elite. Those fortunate are forbidden from ostentatious display of wealth. They are admonished to bend over backwards to remain identified with those less fortunate and to share their good fortune. All that is theory, in practice there is no system of welfare in Pakistan, mostly it is lip-service in the public sector, in the private sector there is evidence of it but it is sporadic. As much as democracy as practiced in Pakistan was a sham, so are welfare schemes. State-sponsored welfare schemes were present in the communist system but these fell prey to inefficiency and corruption. Our meagre forays in this field have faced the same misfortune.
Welfare Schemes have to cater for (1) those who have no means of earning a living and (2) the senior citizens of the State. The minimum common agenda (MCA) should be to provide them with the bare necessities of shelter, medical cover and enough money for food, payment of utility bills, etc. For those employed by the State there is a system of sorts. The Defence Services are closest to an optimum caring for those retired, the civil bureaucracy has a system in place but it is not adequate enough. For the private sector, schemes were instituted during late Zulfikar Ali Bhutto’s regime but they have been overtaken by rampant corruption and gross inefficiency, the Employees Social Security Institution (ESSI), managed separately by the Federal and respective Provincial Governments, and the Employees Old Age Benefit Institution (EOBI) managed by the Federal Government.
The pension system in the Defence Services and the civil bureaucracy is adequate for people when they retire but a few years down the line inflation eats up the value and a genuinely honest person without other means of livelihood is reduced to living virtually on the poverty line. Pension slabs should be indexed with rank, i.e a Lt Col or an equivalent Class 1 civil officer who retires in 1960 should receive the same pension as the one who retires in 1999. At this time the 1960 retiree, if he is alive in 1999, is receiving a pittance compared to the one retiring in 1999, his pension being not adequate enough to provide, having food and medical cover for him. The Army has done well by instituting the Army Housing Scheme that gives those officers who contribute monthly instalments deducted from their pay during their service a house when he retires. Since this came into effect in the 80s, those who retired before were probably expected to simply fade away, there is no such commensurate scheme for the civilian bureaucracy, pension for the private sector employees as promised through ESSI and EOBI remains a dream, when available it is a mere pittance. The thought of a house on retirement must rank as sheer fantasy.
Ex-servicemen have continued medical cover, government hospitals try to provide similar cover for retired civil servants. For the private sector employees there are supposed to be ESSI and EOBI hospitals but if the lack of it would not have been so painful, it would have been a laugh. Whenever available the facilities are pathetic, a cause for common concern or it should be for our rulers. Medical care is a necessary requirement in the old age, the lack of it is scandalous. Even a fraction of the minimum requirement of welfare is not met. In total terms only a fraction of those who retire or are living below the poverty line, manage to get shelter, food and medicine near to adequate quantities.
A long-term self-financing comprehensive package is needed to accommodate a growing population of retirees every year. Even the Defence Forces do not provide housing at the bottom end of the scale to their JCOs and other ranks (ORs). The national plan for civil housing would cater for housing in three categories, each having three bedroom units in varying sizes, depending upon the slab of pension, 10% of the monthly salary would be deducted at source, as compulsory contribution for housing. Computer projections would identify number of housing units by category to be so constructed as to be available for occupation by the retirees in the retirement year. Village housing must be catered for those opting for stay in the rural areas with completely new village habitation identified as a focal point for a multiple number of old villages in the vicinity. This housing could be planned as small unit farm houses in keeping with the environment. Basic Health Units (BHUs) must be specially earmarked for pensioners so that they can cater specially for the ills of the elderly, they should refer serious cases that cannot be handled to Veterans Hospitals. On retirement, the pensioner can be attached to any one Hospital which can maintain the full medical record of the individual, easily accessible by other hospitals when needed. The last leg of the trinity of a truly welfare society is adequate pension. To ensure fair distribution of benefits, pension should be in five slabs. For Class 1 officers three slabs are adequate viz (1) Maj Gen and above and civil equivalent (2) Lt Col and Brigadier and civil equivalent (3) upto Major’s rank and civil equivalent (4) Warrant Officers, Junior Commissioned Officers and civil equivalent (Class 2) and (5) other ranks and civil equivalent (Class 3 and 4). The monthly pension should be 60% of the monthly pay of the highest rank in the slab, 20% of it being be commuted on retirement and given lump sum to the pensioner. This is other than the individual’s own compulsory savings i.e Provident Fund (PF) or gratuity. If he wants to add to his contribution to PF, the normal matching funds should be given as usual so that the individual is encouraged to save and has an additional lump sum available to him (or her) on retirement. Similarly the employer must compulsorily give matching funds for compulsory life insurance which should be divided in case of early demise to viz (1) lump sum payment to next of kin (NOK) and (2) monthly payments to NOK.
All very well, fantastic, but where is the money to come from for, viz (1) pensions (2) housing (3) build and operating hospitals, etc? All this cost money and recurring money at that, not a one-time expenditure alone. At the moment, Government of Pakistan (GoP) levies 7.5% for ESSI, 5% for EOBI as well as other payments like Education (Rs 100 per worker annually), etc. All in all 13-15%, only a fraction of what should be collected reaches the coffers of the State, howsoever honest the office-board senior managers may be. There is no need to maintain a field staff. 15% of the amount shown as expenditures with respect to salaries and allowances to its employees in the annual income tax returns of the firm will be paid into a designated bank account. When the firm gives in its income tax returns it will have to give receipts of the deposits made to the bank account as proof otherwise the returns should not be accepted. The bank will automatically transfer this money into the Central Pension Fund (CPF). Every month, the Federal Government must make a matching contribution to the CPF. Since 5% employees retire every year, the deposits and recurring funds (30% x 15) will approximately 450% of the salaries being paid out to the current employees. This should provide more than adequate funding for the plan. The CPF can be administered by a person of the same stature and qualification of Federal Ombudsman, with the same authority and independence from government. The Fund should have Administration wing, a Finance wing, a Housing wing, a Pension wing and a Medical wing. Each Province and District will have a similar modular set-up, with at least one or more Veteran’s Hospitals in each District, each Police Station having a BHU. No field staff are necessary since the collection of funds will be automatic at source. This will limit corruption as well as make huge savings on expenditures.
With the National Data Base (NDB) of the Federal Ministry of Interior about to issue computerised National Identity Cards (NICs) there will be a capability to data-track each individual and possibility to make a similar CPF Card for everyone. When a person knows his/her future is secured, it will cut down corruption drastically as the individual will not have to try and make his own future bright by extortion, bribes, manipulation, etc. Looking after the future of the elderly, the uniform and the needy is the duty of the State. The only way for Pakistan to become a genuine welfare society is to make an economically viable plan and implement it with honesty of purpose.
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