Rs16b sought for food subsidy

Ministry demands continuation of subsidy on five essential commodities

ISLAMABAD:

The Ministry of Industries and Production has sought immediate release of Rs16 billion on account of subsidy under the Prime Minister’s Relief Package 2020 to cover arrears of previous months.

The ministry approached the Economic Coordination Committee (ECC) of the cabinet, asking it to direct the Finance Division to release the total outstanding subsidy of Rs16 billion under the relief package.

In a recent ECC meeting, the Ministry of Industries recalled that the cabinet committee had approved the Ramazan Relief Package 2022 for the general public, which included subsidy payments on 19 commodities with total relief of Rs8.2 billion effective April 1, 2022 to the last day of Ramazan.

Prior to the month of Ramazan, five essential commodities namely wheat flour, sugar, ghee, rice and pulses were subsidised for the general consumers under the Prime Minister’s Relief Package. However, the Utility Stores Corporation (USC) had to take approval for the continuation of any subsidy post-Ramazan.

The Ministry of Industries was of the view that the subsidy may remain in place after Ramazan on at least five essential commodities.

The ECC was informed that Pakistan Agricultural Services and Supplies Corporation (Passco) was supplying imported wheat to the utility stores at Rs3,283 per 40 kg, which resulted in flour price of Rs3,938 per 40 kg.

However, the locally produced wheat of higher quality was available with Passco for Rs2,473 per 40 kg, which would result in flour price of Rs2,926 per 40 kg.

The ministry requested that the ECC may direct Passco to provide local wheat to the utility stories excluding incidental charges, which would substantially reduce the subsidy requirement for the utility stores.

Linking subsidy with NADRA

The ECC was told that USC was successfully executing the Ramazan Relief Package 2022 through its recently deployed Point of Sales (POS) and Enterprise Resource Planning (ERP) system.

In order to bring further improvement, it was proposed that any subsidy disbursement in future must be linked with online verification with the National Database and Registration Authority (NADRA).

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This initiative will involve a cost of Rs5 per CNIC verification, excluding tax, as indicated by NADRA. This will allow the utility stores to waive the condition of keeping the CNIC photocopy of consumers while ensuring equitable and transparent distribution of subsidy.

The Ministry of Industries requested that the total outstanding amount of Rs16 billion on account of subsidy approved by the ECC for the previous months may be released by the Finance Division immediately.

This will allow USC to “pay its vendors and suppliers for uninterrupted supply and provision of essential commodities to the most deserving segment of the population”.

The ministry submitted its proposals in a summary for ECC’s consideration and approval.

It requested that the utility stores may be allowed to sell five subsidised essential items to one family per month with the help of online verification through NADRA.

The funds involved in this scheme (Rs5 plus tax per verification) may be arranged and provided to USC by the Finance Division every month.

The ECC deferred consideration of the summary submitted by the Ministry of Industries titled “Continuation of Prime Minister’s Relief Package 2020 for the Months of May and June 2022” till the next meeting.

However, the ECC directed USC to continue to sell the essential commodities at subsidised prices as fixed for the Ramazan package.­­

Published in The Express Tribune, May 12^th, 2022.

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