Ramazan package: ECC agrees on Rs3 per kg subsidy on sugar

Decides to reduce sugar, ghee and oil sales on utility stores.

ISLAMABAD:

The Economic Coordination Committee (ECC) of the cabinet, while turning down a proposal of the secretaries committee, has agreed on a lower rate of subsidy on sugar, which will be offered to the people in Ramazan.

Apart from this, the committee decided to reduce sugar, ghee and oil sales in a bid to ease the pressure on national purse under the Razaman Relief Package for 2015.

The proposal for releasing Rs10 million for an awareness campaign did not spark interest, instead, the ECC asked the Utility Stores Corporation (USC) to arrange funds from its own resources.



According to officials, a committee constituted by the ECC had proposed a subsidy of Rs5 per kg on sugar but the latter slashed it to Rs3 per kg.

In a meeting held on April 30, the ECC gave the go-ahead to the Ramazan package provided the expenses of Rs10 million earmarked for the awareness campaign were borne by the USC from its resources. The Finance Division will release Rs1 billion in advance for the sugar subsidy.

The ECC directed a reduction in sugar sales from 80,000 tons to 50,000 tons with a subsidy of Rs3 per kg. Ghee and oil quantities will be slashed from 60,000 to 50,000 tons.

Considering the Ramazan package proposed by the Ministry of Industries and Production, the ECC in a meeting held a week earlier on April 23 constituted a committee comprising secretaries of the ministry of industries, food security and finance and USC managing director.

Its objective was to analyse and compare the proposed volumes and prices of commodities being included in the fresh Ramazan package with those of last year, re-assess the commodities to be included in the new package and bring proposals in the next ECC meeting.

The committee met on April 28 and suggested the quantities and amount of subsidy required keeping in view last year’s sales, current market prices, production and market availability.

It sought subsidy on 18 items and recommended the release of Rs10 million for running the awareness campaign on the electronic and print media.

With a total subsidy of Rs1.59 billion, the committee recommended a subsidy of Rs4 per kg on flour, Rs5 on sugar, rice basmati, rice sela (broken), Rs10 on ghee, oil, gram pulse, moong pulse, masoor pulse, white gram, gram flour and dates.

The recommendations also included a subsidy of Rs8 per bottle of squash and syrups, Rs50 per kg on black tea, Rs10 per litre on Tetra pack milk and 10% on spices.

The Ministry of Industries clarified that the sugar subsidy would depend on successful purchase of the sweetener by the USC and submitted proposals for ECC’s approval. The Ramazan package will take effect from June 15.

Published in The Express Tribune, May 6^th,  2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.