On 1 Apr 1942, Government of British India constituted. 'Military Reconstruction Fund' with monthly contributions at the rate of Rs 2/- for each combatant and Rs 1/- for each non-combatant, for resettlement of Indian soldiers in civil life on demobilisation / retirement from military service after World War II.
During final stages of the war (in 1946), 20% of this fund was retained as Central Reserve and 80% share divided among various provinces/states of India in proportion of their strength in the three Services.
Respective share of the fund was administered by the provinces under provisions of the Charitable Endowment Act, 1890 through their Committee of Administration, consisting of the Governor as Chairman and four members, three of whom were nominated by the Governor and the fourth by the Commander-in-Chief.
By end of World War II (1945), the fund had been redesignated as 'Post War Services Reconstruction Fund (PWSR)' and risen to Rs 97 million (approximately). Govt of India constituted provincial Committees of Administration with Governors as Chairmen and three members to be nominated by Governors and one by C-in-C in each of the provinces of Punjab, NWFP, Sindh and Balochistan.
On partition of India (1947), Pakistan received its share of PWSR Fund. Upto 1953, the provincial shares of fund were being operated through respective provincial Governors.
In May 1953, The remaining balance Rs 18 million (approximately) was, transferred to C-in-C Pakistan who formed a Committee of Administration headed by AG with reps from PAF, PN to administer the Fund.
In Jun 1953, Major Ghulam Hussain was appointed as the first Secretary of Committee of Administration of the Central PWSR Fund.
Details of the Fund received in 1947 and that made available in 1953 are as under:



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1947 1953
(Million) (Million)
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a. Punjab 27.842 14.368
b. NWFP 4.065 3.495
c. Sindh 0.382 0.246
d. Balochistan 0.086 0.123
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32.375 18.232
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Note: Share of East Pakistan (Rs 5.2 million) remained with them.
In April 1954, 1st Industrial project (Textile Mills Jhelum) set up and commenced welfare activities through award of educational stipends. On 14 Dec 1959, foundation stone of 1st welfare project (the TB Hospital, now grown into Fauji Foundation Hospital, Rawalpindi) was laid.
-- On 6 Apr 1960, West Pakistan PWSR Fund Scheme was settled under a Committee of Administration with AG as Chairman and four members (PSOs) from GHQ and one each (PSO) from NHQ and AHQ.
-- On 11 Apr 1960, Mr J. B Morgan, MBE was appointed as the Controller of the industrial projects of the PWSR Fund.
-- On 1 June 1963, Brigadier (Retd) Fazal ur Rehman Khan was appointed first MD of the PSWR Fund.
-- On 13 September 1963, first meeting of the Board of Control (for running of the industries) was held.
-- On 1 Mar 1967, Post War Services Reconstruction Fund renamed as "Fauji Foundation".
-- On 1 Jul 1970, Province of West Pakistan dissolved and Fauji Foundation being a central body, shifted under direct control of Govt of Pakistan.
-- On 3 Feb 1972, Committee of Administration approved the Constitution of Fauji Foundation.
-- On 8 Mar 1972, Fresh Scheme of Administration Fauji Foundation was settled and new Committee of Administration constituted with Secretary Defence (Ministry of Defence) as its Chairman and 4 x PSOs from Army and one PSO each from Air Headquarters and Naval Headquarters as its members.
-- On 20 December 1981, Ex-servicemen (and their families) of Azad Jammu & Kashmir territory became beneficiaries as amended by a Notification issued by the Govt of Pak.
-- On 20 September 1992, Government of Pakistan amended Scheme of Administration whereby the ex-servicemen (and their families) of NLI and MODC/DSG personnel became beneficiaries.
-- On 5 July 2000, Fauji Foundation Head Office shifted from 71, Harley Street to Fauji Towers 68, Tipu Road, Rawalpindi.
-- On 1 October 2001, policy was introduced to refuse beneficiary status to those seeking voluntarily release or dismissed from service on disciplinary grounds.
-- On 1 October 2002, beneficiary status was extended to Mujahid Force personnel conditionally.
-- October 2002, Fauji University established.