ISLAMABAD: The Economic Coordination (ECC) of the Cabinet has approved Rs55,000 million Employees’ Old-Age Benefits Institution (EOBI) budget for the fiscal year 2023-24 as the institution’s earning from investment has increased significantly owing to a higher interest rate.
The ECC is said to have also approved a revised budget for the fiscal year 2021-22 and 2023 with the direction to strictly follow the budget calendar and prepare a long-term plan to clear the Rs2 trillion liabilities of pension dues.
The meeting has been informed there has been a big jump in the investment income owing to the fact that the investments have been made in the Fixed Income Category at the higher interest rates of 21.99 per cent currently prevailing in the money market.
The EOBI investment has generated investment income of Rs56,125 million against the approved target of Rs47,747 million showing an increase of 18 percent.
Ministry of Overseas Pakistani and Human Resource Development in a summary put up to the ECC stated that the EOBI is an autonomous body under the administrative control of the Ministry of OP&HRD and its overall superintendence is entrusted to the Board of Directors as per section 6 of the EOBI Act.
The institution is required to draw an annual budget showing anticipated receipts and expenditure during the following year and shall submit it to the board for the approval of the federal government.
The ministry had earlier submitted a summary to the ECC regarding EOBI’s Budget proposal for revised estimates 2021 to 2023 dated June 26, 2023. This was placed before the ECC dated July 20, 2023, and July 26, 2023. On the directions of the finance minister as chairman ECC, the EOBI was instructed to have discussions with the secretary finance for further clarification on certain budget items.
The chairperson EOBI held a meeting with the secretary finance on July 27, 2023, and provided the required clarifications on various aspects of the EOBI budget 2022-23 and revised estimates 2022-23.
During the meeting, it was decided that as 2022-23 has already gone by and the budgetary expense has been incurred and whereas, the new fiscal year 2023-24 has commenced as such the EOBI, may submit both the budget estimates together with the revised estimates of fiscal year 2022-23 and 2023-24 before the ECC for approval of their budget for both the years for further approval by the Cabinet.
In compliance with the provision of Section 19(1) of the EOBI Act, the cabinet may like to approve the revised estimates 2021-22 and budget estimates 2022-23 and the revised estimates 2022-23 and the budget estimates 2023-24 of the EOBI.
The meeting was also informed that the DC (F&A) EOBI presented before the board the revised budget for the fiscal year 2022-23 and the proposed budget for the fiscal year 2023-24. The board was informed that the institution’s subject budget for fiscal year 2023-24 was placed before the audit committee of the board in its 50th meeting on 20-06-23, which has already recommended the budget for approval of the board.
The DO (F&A) informed the Board that the EOBI is expected to collect contribution of Rs39,000 million against the target of Rs33,550 million during the year which shows a year-on-year increase of 24 per cent while for the year 2023-24, a contribution target of Rs55,000 million has been proposed.
The financial advisor Ministry of OP&HRD observed that the target of contribution collection appeared to be quite ambitious keeping in view the prevailing economic and business conditions.
However, the chairperson argued that since EOBI has started receiving contribution from a large number of employers on revised minimum wage and there are further expectations of increase in minimum wages in the budget, therefore, the target is achievable and the EOBI should go-ahead with the target.
Also, in case there are issues in terms of collections, the management will come back to the Board. The president BOT and DG (FA) endorsed her point.
Copyright Business Recorder, 2023
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