Role Of Pakistan Bait-ul-Mal In Social Welfare

• Pakistan Bait-ul-Mal (PBM) has spent Rs. 11.3 billion on administrative expenses—78% more than its largest welfare programme.
• Core programmes like orphan care and cochlear implants cover less than 0.1% of the target population, raising concerns about reach and impact.
• Despite reforms like biometric payments, PBM still lacks access to central databases like NSER, limiting effective targeting and transparency.
• A potential merger with BISP could enhance efficiency and scale, provided PBM’s specialised services are preserved under a unified framework.

This insight outlines the basic functions and structure of Pakistan Bait-ul-Mal (PBM) and a financial analysis to suggest possible reforms. PBM, Pakistan’s first federal-level public sector social safety network, was created in 1989 in response to the signing of the UN Convention on the Rights of the Child. Established as an autonomous corporate body under the PBM Act of 1991 and Article 4, PBM provides financial assistance, medical aid, educational support, housing, and vocational rehabilitation to the vulnerable population.  While the Act lists multiple sources of income, PBM is primarily supported by government grants. Since its inception, PBM has undergone multiple shifts in administrative control (Figure 1). Although it now falls under the Ministry of Poverty Alleviation, its involvement is minimal.

UNITY IN DIVERSITY: EXPLORING PAKISTAN’S LINGUISTIC LANDSCAPE

The ministry also houses other federal welfare nets, including the Benazir Income Support Programme (BISP), Trust for Voluntary Organisations (TVO), National Poverty Graduation Programme (NPGP), and the Pakistan Poverty Alleviation Fund (PPAF).  In parallel, about 14 key welfare bodies work at the provincial level in Pakistan. Figure 1 PBM currently operates nine programmes, including Pakistan Sweet Homes (PSH), Shelter Homes (SH), Great Home (GH), Roti Sab Kay Liye (RSKL), Orphan & Widow Support Programme (OWSP), Women Empowerment Centres (WECs), Individual Financial Assistance (IFA), Cochlear Implant Program (CIP), and Schools for Rehabilitation of Child Labour (SRCL). Additionally, PBM also offers supportive grants to NGOs. Figure 2 presents a financial analysis of PBM from FY 2001–02 to 2023–24.  Figure 2

From 2001 to 06, inflows exceeded outflows by an average of Rs 1.15 billion, with a sharp underspending of Rs 6.3 billion in 2007. This is unusual for a welfare organisation, especially given that poverty rates remained above 47%, and a major earthquake struck in 2005. An 84% drop in inflows around 2008–09 coincided with the global financial crisis and the creation of BISP, which took over PBM’s functions, including poverty surveys.  While this explains the funding reduction, it also raises a key question: why PBM was underspending despite holding primary responsibilities during this period.

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Between 2008 and 2015, outflows exceeded inflows, with PBM relying on prior surpluses. Since 2017–18, however, inflows and outflows have been nearly identical and often differ by a few Rupees. While this could reflect tighter budgeting, PBM’s history of underspending may also suggest that limits were set to match available funds rather than actual need. Without detailed disbursement data, it is challenging to determine whether this pattern stems from fiscal discipline, institutional constraints, or other administrative or political factors. Figure 3 illustrates PBM’s programme budget distribution between 2019 and 24. Figure-3

  Figures 4 and 5 reflect PBM’s high and low-budget outflows from 2019-24. Figure-4

As illustrated, funding for WECs, IFA (Education), and SRCLs has been inconsistent, while IFA (Medical) funding has declined. PSH funding has generally increased since 2021. Administrative Expenses (AEs) are PBM’s largest cost and have grown despite cuts to core programmes. Over five years, AEs totalled Rs. 11.3 billion, 78.41% higher than the costliest welfare programme. This is partly due to PBM’s unusual 1 to 3 administrative-to-operational staff ratio (1,100 to 3,300).  Furthermore, AEs reached 35.5% of total spending, exceeding the 20% benchmark, and raising transparency concerns noted by the Supreme Court. Figure-5

Among low-budget outflows, SH, RSKL, and OWSP were launched after 2019. While SH and RSKL received considerable funding post-launch, OWSP faced erratic allocations and remained unfunded in FY 2021-22. Meanwhile, CIP saw a 1691.46% funding spike in 2023–24, reflecting inconsistent allocations. Low-budget programmes received just 29.1% of AEs’ spending over five years, making them appear tokenistic. There is a need for a strategic review of PBM’s programmes to assess their impact. However, a comprehensive evaluation is challenging without key performance data, including the beneficiary count (unavailable for some programmes), unit costs, and impact indicators. The lack of geographic and demographic breakdowns further complicates these efforts.

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For example, in FY 2022-23, WECs received Rs. 513.58 million for 158 centers (approximately Rs. 3.2 million per center),  but there are no published impact measures to assess what difference was made. Similarly, PSH received Rs. 957 million to support 4,172 orphans, representing only 0.09% of Pakistan’s estimated 4.6 million orphans, with no educational attainment or reintegration metrics. Additionally, PBM focuses on charity rather than sustainable empowerment, particularly in programmes such as vocational training or IFA, where output measures success rather than impact. The CIP offers a rare instance of measurable reach: since its launch in 2019, it has served 1,005 deaf-by-birth children.  Given that Pakistan roughly has one million deaf children of school-going age, this covers about 0.1% of potential beneficiaries over five years. Despite its many programmes, PBM’s impact remains unclear without systematic monitoring or outcome evaluation, suggesting a focus on spending rather than long-term, sustainable results. PBM’s outflow disbursement mechanisms include bank transfers for scholarships and financial assistance, cheques deposited into public hospitals’ accounts for medical aid, and direct delivery of in-kind support, such as sewing machines, prosthetics, and cochlear implants. Despite reforms like e-filing and biometric payments, PBM lacks access to centralised databases like the National Socio-Economic Registry (NSER) and a monitoring dashboard, limiting its ability to target and monitor programmes effectively.  Without these, PBM is vulnerable to inefficiencies and fraud, as recent Auditor General reports highlight over Rs. 2 billion in irregularities. In contrast, organisations like BISP, which use centralised databases, are more data-driven and scalable, allowing for better targeting and evaluation. Not surprisingly, there have been discussions about merging PBM and BISP, aiming to streamline operations,  reduce administrative duplication, and enhance efficiency.  Both institutions serve an overlapping population and often rely on similar eligibility indicators, but have differing operational models. However, a merger where PBM’s welfare programmes are absorbed into a specialised wing within BISP could combine the scalability and efficiency of BISP with the personalised service delivery of PBM. This would reduce redundancy, improve resource allocation, and unify monitoring systems under one robust framework. However, such a move must be strategically managed to avoid diluting PBM’s specialised services, such as orphan care, cochlear implants, and emergency medical aid, which should be preserved through tailored sub-programmes. With the proper safeguards and planning, this integration could yield a more cohesive and efficient national social protection system that delivers broad-based financial assistance and targeted care to the vulnerable. To conclude, PBM’s lack of a centralised database and monitoring system and fragmented funding approach raises concerns about impact, transparency, and efficiency. Recurrent debates about PBM’s absorption into BISP offer an alternative path towards optimisation. However, such integration merits thoughtful maintenance of PBM’s unique services under the overhang of BISP.