Pandemic delays USC automation

PM voices concern; process will now be completed by June 2021

ISLAMABAD:

Prime Minister Imran Khan has expressed concern over delay in adoption of information technology solutions by the Utility Stores Corporation (USC) as automation of the state-owned store chain is critical for controlling pilferage and corruption.

In a recent meeting, cabinet members also voiced concern over poor performance of USC, which could control food inflation in the country by providing subsidised essential commodities to consumers.

The cabinet was informed that the automation process at USC had been delayed due to the Covid-19 outbreak and it would now be completed by June 2021.

During the ensuing discussion, the cabinet members pointed to frequent complaints about utility stores running out of stocks of essential food items. It was highlighted that failure to implement a franchise model had hampered the expansion of USC outreach and with just 4,000 stores across the country it had failed to control food inflation.

USC managing director told the meeting that sales of utility stores had increased seven times and their operating cost had come down from Rs7 billion to Rs2 billion. However, price differential with the open market made it impossible for USC to keep pace with demand, affecting the availability of essential food commodities, he said. In a presentation, a representative of the Industries and Production Division said policy affairs of USC, a public sector company, were being managed through the board of directors.

At present, the total number of directors on the USC board was 10, notified by the Ministry of Industries and Production on the basis of decisions taken by the cabinet on November 1, 2018 and March 10, 2020.

The cabinet was told that USC mainly depended on government releases in the form of funds, loans or guarantees with clear stipulations. It was the responsibility of USC board to ensure proper utilisation of finances in line with the policy framework.

The federal government had approved a total grant of Rs71 billion for USC since December 2019 on account of subsidy and procurement of essential commodities. Of the total, the Benazir Income Support Programme (BISP) released Rs21 billion for USC while the Finance Division provided Rs10 billion. A case for the release of remaining Rs40 billion by the Finance Division was under process.

Joint secretary corporate finance was the representative of Finance Division on the USC board as an ex-officio director. However, there was no representation of BISP or the Poverty Alleviation and Social Safety Division to oversee the utilisation of funds. Therefore, according to the presentation, the representation of Poverty Alleviation Division in the USC board was necessary in order to identify the deserving people for targeted subsidy with the help of database maintained by the BISP.

The proposed measure would also help USC to expedite the automation process in the organisation by emulating the experience of BISP. In that regard, a proposal was shared with the Poverty Alleviation and Finance Divisions to solicit their views and comments. The Poverty Alleviation Division recommended the nomination of BISP director general (NSER) as ex-officio director on the USC board.

The representative of the Industries and Production Division also pointed out that USC board director Zaheer Baig had tendered his resignation.

Keeping that in view, the official asked the cabinet to accept Baig’s resignation dated August 3, 2020. It also sought approval of nomination of BISP director general (NSER) as ex-officio director on the USC board. The cabinet gave its nod.

Published in The Express Tribune, October 23^rd, 2020.

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