ECC slashes Ramazan package by Rs6b

Cabinet body endorses Rs23.5b worth of funds

ISLAMABAD:

Prime Minister Shehbaz Sharif's Ramzan Relief package remained underfunded after the Economic Coordination Committee (ECC) of the cabinet on Thursday approved Rs6 billion less than the demanded money due to "fiscal prudency".

As against the total requirements of Rs29 billion to distribute Rs13,000 per family among shortlisted 2.1 million families and operational expenses, the ECC endorsed Rs23.5 billion worth of funds, showed the details released by the Ministry of Finance after the meeting.

The ECC did not accept the request by the Poverty Alleviation and Social Safety Division for the approval of the Rs25 billion needed funds. The Ministry of Finance advised the ECC that only Rs19 billion already budgeted amount should be approved while maintaining a balance between the relief and fiscal prudence.

The ECC considered a summary submitted by the Ministry of Poverty Alleviation and Social Safety seeking approval of funds amounting to Rs25 billion for the Prime Minister's Ramzan Relief Package, according to the Finance Ministry's statement.

"The Finance Division informed the committee that Rs19 billion had already been budgeted for the Ramzan package for the current financial year and that the remaining requirement would be released as and when necessary", it added.

The ECC accordingly approved the immediate release of Rs19 billion to enable prompt commencement of disbursement, while agreeing that any additional funds would be considered in line with evolving requirements and available fiscal space, said the Finance Ministry.

The government on Thursday advertised in the national press that the Prime Minister had approved Rs38 billion Ramzan relief package.

However, the Rs38 billion is inclusive of Rs10 billion which is pegged with the relief package but essentially is part of Pakistan's commitments with the international lenders to annually increase the stipends of the beneficiaries of the Benazir Income Support Programme.

The ECC's decision to approve and disburse funds in tranches may delay the intended benefits, as the government's plan was to immediately release Rs13,000 to 2.1 million identified families.

With the approval of Rs19 billion against the Ramzan package budget allocation and another Rs3.5 billion through reappropriation, the Poverty Alleviation Division is now short of approximately Rs6 billion, according to the government officials. They said that the choice would be either to reduce the number of beneficiaries or the one-off cash stipend, or the Ministry of Finance shows willingness to cough the remaining amount.

The Finance Ministry claimed that the Rs29 billion has been arranged through three components considered by the ECC, including the technical supplementary grant, operational expenditures, and the regularization of re-appropriated funds. The ministry claimed that this financing structure ensures that the package is fully resourced while maintaining fiscal discipline and transparency in implementation.

However, despite adding these three components, the PM's package was still under-funded by Rs5.5 billion.

A senior Finance Ministry official said that there would be a constant pre-audit and post audit of selected beneficiary data base through various controls.