PM unveils country’s biggest ever subsidy package

Imran says 20m families to get 30% off on ghee, flour, pulses; hints at fuel price hike

Prime Minister Imran Khan addressing the nation during a live telecast, on November 3, 2021. PHOTO: PID


Prime Minister Imran Khan Wednesday announced “Pakistan’s biggest ever” subsidy package worth Rs120 billion to support 130 million people from the impact of inflation, as part of the government’s efforts for making the country a welfare state.

Under the package that is a part of the Rs260 billion Ehsaas Initiative, around 20 million families, which make up for 53% of the country’s total population, would avail a 30% discount on three food commodities – ghee, flour and pulses – for the next six months.

Imran unveiled the subsidy package in a televised address to the nation. He said that 30% subsidy on ghee, flour and pulses would be given to the weaker segments of society in view of the prevailing inflation in order to protect them from price hike.

In addition, he said, 4 million deserving families would get interest-free loans to build houses, one member of each family in the country would be provided with health insurance card, Rs47 billion allocated for 6 million scholarships, while Rs1,400 billion for the Kamyab Jawan Programme (KJP).

“The Sehat Insaaf Card facility will be provided in Islamabad by December and across Punjab by March 2022,” the prime minister announced. Imran also urged the Sindh government, where the opposition Pakistan Peoples Party (PPP) is in power, to also issue health card.

Imran said that the government was presenting the largest welfare programme in the history of Pakistan, which would be jointly funded by the federal and provincial governments. He thanked the Ehsaas team, for compiling the national database of households in the last three years.

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He said that the Ehsaas data enabled the government to launch the subsidy programme. “It was not easy to give subsidies without data,” the prime minister said. “Today, we have a data and now I am in a position to announce… country’s biggest ever welfare programme,” he remarked.

Imran said that when the Pakistan Tehreek-e-Insaf (PTI) came to power in 2018, the economic situation of the country was very bad. “We inherited a Pakistan with the biggest ever fiscal deficit, foreign debt burden, heaviest mark-up, and the foreign exchange reserves at low ebb,” Imran said.

“There was no money in the national coffers to pay back debts,” he said, adding: “Pakistan had to go to the IMF [International Monetary Fund] due to depleting forex reserves.” He thanked Saudi Arabia, the United Arab Emirates (UAE) and China for supporting Pakistan in difficult time and saving it from default.

“The government spent the first year in stabilising the economy but when it was close to stabilising it, the country faced the biggest crisis in 100 years – the coronavirus epidemic. Not only Pakistan but the entire world was affected by the global epidemic of coronavirus,” he added.

“The poorest countries were most affected by the coronavirus crisis. But the way we took decisions in this difficult time is commendable. On the other hand, hospitals in neighbouring India were filled with patients during the pandemic. In India, the situation worsened even they ran out of oxygen,” he added.

The prime minister said that Pakistan did not carry out a complete lockdown, instead, it adopted a smart lockdown strategy that proved to be very effective. He mentioned that Pakistan’s anti-coronavirus arrangements were appreciated globally.

Giving an overview of the Covid impact on world economy, the prime minister said that the United States spent $4,000 billion to support its economy, while Pakistan could only scrape $8 billion to avert the burden of unemployment and support the industry, construction and agriculture.

The prime minister said owing to the government’s prudent policies, the country witnessed a 13.8% growth in rice production, pulses 8%, sugarcane 22%, wheat 8% and cotton 81% growth. "We saved our agriculture sector during the corona pandemic," Imran said.

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Following the incentives announced by the government, the construction projects worth Rs600 billion were ongoing and the large scale manufacturing (LSM) achieved record growth, he said, adding that the profit of engineering sector rose by 350%, textile sector 160%, automobiles 138% and cement 113%.

Besides, the country’s tax collection also grew by 37% as the government had already surpassed the set target. “Our [economic] indicators are on right course. IT [information technology] achieved 47% growth last year and this year it will touch 75%. This is good news for the youth,” he remarked.

The prime minister admitted that inflation was a problem. “No doubt the inflation is an issue,” Imran said but stressed that instead of merely criticising like opposition, the media should also teach the people about the worldwide inflation.

Quoting the Bloomberg Commodity Price Index, Imran said that commodity prices rose by 50% worldwide in a year against just 9% in Pakistan. “Gas prices surged by 116% in the US and 300% in Europe but Pakistan made no increase, except for the imported,” he added.

Giving a comparison of the prices food items in the region, the prime minister said flour rate was Rs83per kilogramme in India, while Pakistan had half of the world’s average price. Moreover, pulses were being sold at Rs338 in India against Rs162 in Pakistan.

Continuing, he said oil prices in the global market increased by 100% but Pakistan shifted only 33% of the burden to the consumers. “Even oil prices in India surged to Rs250, Bangladesh to 200, while it was at Rs138 in Pakistan,” he added.

He said that the government refrained from shifting the burden on the masses, otherwise, it could bring in additional Rs450 billion revenue to the exchequer. However, he added that government would have to increase the oil prices, otherwise the deficit would increase.

Commenting on the opposition’s criticism, Imran vowed to bring down the food prices to half if the two opposition leaders’ families brought back even half of the looted money. Imran appealed to the industrialists and businessmen to take special care of labour class and give them a pay raise.

Digital Kiryana stores

Meanwhile, the Prime Minister’s Office issued details of the subsidy package, approved by the federal cabinet on Tuesday. Under the package, a subsidy of Rs1,000 a month would be given to each of the 20 million families with a poverty score of less than 39 and an income of Rs31,500 per month.

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The Ehsaas has developed a digitally-enabled mobile point of sale system in collaboration with National Bank of Pakistan (NBP) to serve beneficiaries through a network of Kiryana stores designated by the NBP, all over the country.

This system will digitise parts of the retail sector; there will be use of real time data for decision making. This process will help make beneficiaries and storeowners more digitally adept. For online registration of beneficiaries, Ehsaas will open a registration portal next week.

The participating Kiryana store owners will be required to open bank accounts, which will help further increase financial inclusion and settlement payments made through RAAST will help increase scale of digital transactions in Pakistan.

In the interest of transparency, the registered Kiryana stores and beneficiaries will undergo a rigorous verification process to minimise the incidence of fraud. The federal government and all participating federating units will share fiscal resources in the ratio of 35/65.

The governments of Punjab, Khyber Pakhtunkhwa, Gilgit Baltistan and Azad Jammu and Kashmir (AJK) have already agreed to participate in the programme. In other federating units, the federal share of the subsidy worth Rs350 per month will be given to each eligible household.

Meanwhile, Minister for Information and Broadcasting Chaudhry Fawad Hussain on Wednesday said Prime Minister Imran Khan's 'Mega Relief Package' would benefit millions of people, especially to low-income ones.

In a tweet, he said decline in commodities prices at global market was expected and its impact would start to unfold within next six months. If the government had not been successful to deal with coronavirus pandemic, the challenges for us would have been manifold, he added.



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