ECC approves Rs48b cash aid for poor

Turns down railway’s demand for Rs10b package for pension payments

Shahbaz Rana December 02, 2021
Nearly one-third of Pakistan’s population live on daily, piece-rate wages. Image: REUTERS/Akhtar Soomro


The government on Wednesday approved the grant of one-time cash assistance of Rs48 billion to 4 million poorest people but rejected the demand for a Rs10 billion bailout package for paying pensions to Pakistan Railways employees due to fiscal constraints.

The Economic Coordination Committee (ECC) of the cabinet, which took these decisions, deferred the approval of a summary that sought Rs5.5 billion in supplementary budget to continue subsidies on five essential items at utility stores to ease the impact of skyrocketing prices.

Federal Minister for Economic Affairs Omar Ayub Khan chaired the ECC meeting and endorsed the decisions referred to him by the finance adviser-led sub-committee of the ECC.

The ECC rejected a summary of the Pakistan Railways that sought a bailout package of Rs9.93 billion for clearing the outstanding pension liabilities including the prime minister’s assistance package for the families of deceased employees, said an official after the meeting.

Finance Adviser Shaukat Tarin said in the meeting that the government’s priority was to revive the International Monetary Fund (IMF) loan programme and at this stage it could not afford to dole out money to the Pakistan Railways.

Railway authorities pleaded that the entity was facing difficulties in paying salaries, regular monthly pensions, meeting cost of fuel and maintenance and other operational needs.

They added that the railway was unable to settle the dues of retired employees and widows of deceased persons, which had been pending for a long time.

They said that courts had been sending notices to clear the dues and the matter could be taken up anytime by the Supreme Court.

In the budget, the government had approved a Rs42 billion grant-in-aid to pay pensions in the current fiscal year.

BISP aid

The ECC approved a summary for the inclusion of beneficiaries of Ehsaas Kafalat Programme with PMT score in the range of 29.01 to 37 under the recent National Socio-Economic Registry survey in the Ehsaas Emergency Cash-2 (EEC-2) Programme, according to a statement issued by the economic affairs ministry.

These beneficiaries would be provided a one-time emergency cash assistance of Rs12,000 per beneficiary on a ‘first-come first-served basis’, it added.

Four million additional beneficiaries will be identified over a period of time by using a higher eligibility threshold and will be provided one-off cash assistance of Rs12,000, according to the decision.

The Benazir Income Support Programme (BISP) also wanted to give one-time cash aid to those people who were earlier getting grants under the old survey but became ineligible after the National Socio-Economic Survey. The Finance Division opposed it, saying it would cost the national kitty Rs6 billion.

Under the first phase, Rs179.3 billion had been disbursed among 14.83 million beneficiaries. Federal auditors made objections to the spending of Rs25 billion but PM Special Assistant Dr Sania Nishtar denied any wrongdoing in the process.

USC subsidies

The ECC deferred decision on the Ministry of Industries’ demand for a Rs5.54 billion subsidy for November-December 2021 to continue subsidies on five essential items.

The ministry had sought Rs1.5 billion for giving subsidy on wheat flour to sell it for Rs47.60 per kg, Rs1.7 billion for ghee to provide the commodity at Rs260 per kg and Rs2.3 billion for sugar to ensure its supply at Rs85 per kg.

Another Rs30 million was sought for selling rice and Rs53 million for selling pulses at prices marginally lower than market rates.

An amount of Rs2.6 billion was sought to settle the November subsidy dues and another Rs2.9 billion for the current month. But the ECC did not take decision.

Instead of providing a supplementary grant, the Ministry of Finance advised the use of existing resources or putting off the matter till the next fiscal year.

However, Utility Stores Corporation (USC) told the ECC that it did not have fiscal space to give subsidy from within the budget, as Rs10 billion worth of outstanding dues were already awaiting clearance from the finance ministry.

Under the PM’s relief package, USC is providing subsidies on five essential items – wheat flour, ghee, sugar, rice and pulses. There has been a significant delay in the installation of point of sales to give the targeted subsidies by the bidder – National Radio and Telecommunication Corporation. So far 2,300 machines have been installed out of 3,700 stores.



The ECC put off decision on a request to stop power distribution companies from forfeiting guarantees that Heavy Electrical Complex (HEC), which produces electricity transformers, had given against Rs1.3 billion work.

HEC had not been able to execute orders worth Rs1.3 billion since July 2018 due to increased cost of inputs coupled with the liquidity crunch, the ECC was informed.

Fesco has approached the Bank of Khyber to en cash Rs70.4 million guarantees and other DISCOs are also expected to en cash Rs201 million guarantees, according to the Ministry of Industries.

It had requested the government to stop DISCOs from forfeiting the guarantees that would jeopardise the privatisation process.

HEC privatisation is also facing delay due to a disagreement over fixing the reserve price. Financial advisers have proposed Rs1.2 billion as the minimum price at Rs82.8 per share, while board members wanted to set minimum sale price of Rs1.4 billion at Rs98.3 per share.


Food programme

The ECC allowed the World Food Programme (WFP) to purchase 175,000 MT imported wheat from Pakistan Agricultural Storage and Services Corporation Limited’s (PASSCO) stock for Pakistan and Afghanistan. This includes 15,000 MT for Pakistan and 160,000 MT for Afghanistan.

The wheat flour will complement the WFP’s food basket for distribution to the food vulnerable population in Pakistan and Afghanistan within the WFP’s commitment to eliminate hunger.

The ECC discussed in detail and approved the proposal submitted by the Ministry of Energy for increase of OMC’s and Dealers’ margins for Motor Spirit (MS) and High Speed Diesel (HSD) with effect from forthcoming revision in oil prices, according to the Ministry of Economic Affairs.

It increased dealer margin on petrol rises by 99 paisa to Rs4.90 per liter and dealer margin on diesel up by 83 paisa to Rs4.13 per liter.

Published in The Express Tribune, December 2nd, 2021.

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