The government on Monday approved increasing cash stipend of the Benazir Income Support Programme beneficiaries by Rs2,000 per annum aimed at meeting a prior condition for a $400 million loan by the World Bank.
Headed by Minister for Finance Shaukat Tarin, the Economic Coordination Committee (ECC) of the cabinet approved the enhancement of Ehsaas Kifalat monthly stipend to the tune of Rs166 per month per beneficiary with effect from January 1, 2022, stated the Ministry of Finance after the meeting.
The ECC met a week before the meeting of the Board of Directors of the World Bank that is taking up Pakistan’s request for two budget support loans totalling $800 million.
One of the prior conditions for qualifying one loan was to increase the size of the cash disbursements to the BISP beneficiaries, according to the Ministry of Finance documents.
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Each BISP beneficiary gets Rs24,000 annually, which has now been increased by Rs2,000 or 8.3% with effect from January next year.
The 8.3% increase in the monthly stipend is slightly lower than the average inflation rate of around 9% for this fiscal year 2020-21, ending on June 30.
The ECC was informed that the Ministry of Finance is engaged with the World Bank to secure two budget support loans.
“One of the indicative triggers for prior action for Securing Human Investments to Foster Transformation (SHIFT) is that the cabinet approves a framework allowing vertical expansion of the BISP’s Kafalat Programme with updated National Socio Economic Registry and a mechanism for periodic update of regular cash transfer benefits. The mechanism is also a requirement of the IMF programme,” according to the Finance Ministry.
However, the Finance Division was of the view that the BISP unconditional cash transfer programme (Ehsaas Kafalat) has undergone a transformational change in the last two years and given the government’s fiscal situation, regular automatic enhancements were not an option.
The finance ministry said that the ECC approved the request of the Poverty Alleviation & Social Safety Division regarding Indexation Policy for Cash Transfer and allowed BISP to adopt the institutional mechanism for periodic update of regular cash transfer benefits to Ehsaas Kafalat Beneficiaries of Benazir Income Support Program.
The beneficiaries would receive an additional cash of Rs166 per month due to indexation, which will come to Rs2,000 a year.
The ECC also formed a committee to review the mechanism in light of observations made by the Secretary Finance .The Committee will be chaired by Secretary Finance Division.
The other members of the Committee would be Additional Finance Secretary, Secretary Poverty Alleviation and Social Safety Division, Economic Advisor Finance Division, and one co-opted member for independent technical advice.
The terms of reference of the committee would be to consider and recommend any update/adjustment of regular cash benefits of BISP, i.e., Ehsaas Kafalat Programme for inflationary reasons within a period of three years from last enhancement to the Federal Cabinet for approval.
The committee would also consider and approve any update/adjustment of cash transfers under BISP Programmes other than Ehsaas Kafalat Programme.
The ECC also approved the additional funds requirement of Rs75 million of the Ministry of Housing and Works in respect of three development schemes. Technical Supplementary Grant amounting to Rs43 million in favour of Ministry of Housing and Works was also approved.
The ECC allowed Information and Broadcasting Division for re-appropriation of PSDP funds of Rs17.6 million through Technical Supplementary Grant. The Interior Ministry’s request of Technical Supplementary Grant of Rs30 million was also approved.
Similarly, Technical Supplementary Grant request of Ministry of Narcotics Control for Rs5 million, Science & Technology for Rs317 million and Establishment Division for Rs54 million was approved in the ECC Meeting. Arrears of contribution amounting to Rs3.4 billion on account of Group Insurance Fund by the Finance Division on behalf of the Federal Government Non-Gazette (BS 1 to BS ) employees was also approved in the meeting.
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