Bitter truth about Sasti Roti

Authorities in Punjab scrap Sasti Roti scheme after Rs7.85 billion loan debt accrued from commercial banks.

LAHORE: Authorities in Punjab scrapped the Sasti Roti scheme after the Rs7.85 billion loan debt accrued from commercial banks was left unpaid by the food department owing to non-provision of funds earmarked in the financial years 2009-10 and 2010-11, The Express Tribune has learnt.

This is in stark contrast with a provincial government claim that it had scaled back the scheme as Rs5 billion allocated for the purpose in the current financial year had been diverted into a pool of funds for flood rehabilitation and reconstruction activities. But an official document shows that only Rs1.6 billion out of the cash earmarked for subsidy on Sasti Roti was contributed in funds released for flood-hit areas.

The flood in fact helped deflect criticism away from the pilferage in subsidised wheat flour, nepotism in grant of quota and lack of a proper mechanism to monitor the self-claimed, pro-poor scheme during the last two years, several officials said. Since October 2008, the provincial government had pumped more than Rs9 billion into this “ill-planned, merely conceptual and unfocused subsidy scheme for political motives,” they added.

Chief Minister Shahbaz Sharif even sacked two provincial secretaries, one commissioner and three district coordination officers who opposed the scheme.

The scheme was not well-thought out and was started in haste owing to which above 70 per cent of tandoors located in posh areas attached with hotels and food outlets were taken into the network by the official concerned for ulterior motives.

After five months of subsidised wheat flour, the government came around to the viewpoint of the food and finance departments and discontinued supplies to 20 per cent of tandoors attached with eateries frequently visited by well-off segments of society while cancelling their registration. Even 40 per cent pilferage of subsidised atta was reported in which the oven owner and the official of the district government were involved.

The government failed to outline a regulatory mechanism to check and monitor the utilisation of a full quantity of provided subsidies of atta because it was not physically possible owing to lack of required infrastructure and manpower. There were no policy/rules and criteria for the issuance of quota, installation and enlistment of tandoors and to make it pro-poor. Nepotism was the hallmark of the scheme, they added.

In financial year 2009-10, the finance department on the directions of Shahbaz Sharif allocated Rs6 billion to provide a subsidy on wheat flour being provided to registered ovens for Sasti Roti. During the same fiscal year the Punjab government faced severe financial crisis and availed huge overdraft money from the State Bank of Pakistan even beyond the limit to deal with the government’s day to day business and financial affairs. The financial year 2009-10 ended with an overdraft amount of Rs21 billion.

In order to continue the Sasti Roti, the food department accrued a loan of Rs6.350 billion from commercial banks at an annual interest rate of 16 per cent during financial year 2009-10. But on the other hand the finance department did not release a single penny from the allocated funds – Rs6 billion – to repay the loan amount used on Sasti Roti subsidy.

The finance department earmarked Rs5 billion in the current financial year to provide subsidy on Sasti Roti during 2010-11.

But once again the finance department failed to release the required amount and the food department availed Rs1.496 billion from the commercial banks on the same interest rate to continue Sasti Roti till November 14.

In August, a devastating flood hit southern parts of the province and caused colossal damage. In order to tackle the alarming situation, the finance department released Rs9 billion for relief operations and rehabilitation work in flood-hit districts while making a cut in the annual development programme. In total diverted funds of Rs9 billion, Rs1.6 billion budgeted subsidy earmarked for Sasti Roti scheme out of Rs5 billion was contributed in the pool of funds for relief and rehabilitation operations.

Taking cover behind the flood, the Punjab government on November 14 disbanded Sasti Roti in the province on the pretext that Rs5 billion allocated for the purpose had been included in the funds diverted for the rehabilitation of flood victims.

The scheme was reduced to only dastarkhawans and mechanical tandoors and only subsidised wheat is being issued for this purpose.

Now the food department, according to a document available with The Express Tribune requested the chief minister for the provision of Rs7.85 billion to enable it to retire the loan liability of Sasti Roti scheme availed during 2009-10 and 2010-11.

On the request of the food department, the finance department observed that it was not in a position to accede the request for immediate release of Rs5 billion. The food department was advised to discharge the said liability in a phased manner during the current financial year.

A senior official of the finance department said the government worked out a mechanism in the current financial year 2010-11 whereby the department was providing funds to the provincial account-II (Food). The finance department had released Rs3 billion for this purpose and this amount was placed into the same account, he added.

Background of the scheme

When it was first introduced in September 2008, Sasti Roti was meant only for the month of Ramazan. But the authorities decided to continue the scheme till June 30, 2009.

The government had earmarked Rs7.5 billion to continue the subsidy on flour bags till the end of the financial year 2008-09 for Sasti Roti and other food items.

In October, the food department started provision of subsidised atta to registered tandoors (ovens) in five big cities for Sasti Roti and later its supply was extended across the province.

The Punjab food department with the help of the district governments identified above 14,500 tandoors to provide subsidised flour bags of 20kg at the rate of Rs250 for provision of Roti at Rs2 to the masses. Under the scheme, the range of 5 to 30 bags was fixed for each tandoor according to sale and baking capacity in all cities of the province.  Out of the total ovens, 3,500 were registered in Lahore. The food department had to provide 65,000 bags per month to these enlisted tandoors.

The government established the Sasti Roti Authority headed by Hanif Abbasi, a federal lawmaker of Pakistan Muslim League-Nawaz, to supervise and monitor the scheme and make it result-oriented. The government promulgated the Sasti Roti Act in August 2009 to provide legal cover on a permanent basis.

Published in The Express Tribune, November 28^th, 2010.