ISLAMABAD: The Poverty Alleviation & Social Safety Division (PASS) has reportedly accused Finance Division for not taking responsibility of Rs 106 billion Ehsaas Targeted Commodity Subsidy Program (ETCSP), well informed sources told Business Recorder.
These accusations were hurled by the PASS headed by Dr. Sania Nishtar in writing at a meeting of Economic Coordination Committee of the Cabinet, which met on December 17, 2021 under the chairmanship of Minister for Economic Affairs, Omar Ayub Khan.
The Economic Coordination Committee of the Cabinet was informed that since Cabinet Division (stipulations) field research
and stakeholders’ consultations have necessitated certain design and operational changes, the ECC must keep in mind that Finance Division has regretted that it cannot take responsibility of oversight of the Ehsaas Targeted Commodity Subsidy Program (ETCSP); therefore, a project management unit (PMU) housed in the existing Ehsaas Delivery Unit of the PASS Division needs to be set up. Responsibilities of the PMU staff and associated budgetary implications are mentioned in the program design document and may be approved.
In addition, the ECC was requested to review the Cabinet’s earlier decisions and allow the following: (i) disbursement of subsidy and payment of allied expenditures through an assignment Account of the PASS Division subject to fund flow mechanism to be notified by the Finance Division; (ii) engagement of NBP to implement the program under rule 42 (f) of PPRA Rules, 2004, as the only state owned bank with nationwide coverage.
The PASS Division will enter into a MoU with NBP for this purpose and will reimburse all relevant costs incurred by NBP on a monthly basis subject to an independent audit and ‘authorization’ by the Program Steering Committee.
NBP’s costs under this arrangement for the period January 1, 2022-June 30, 2022 are not expected to exceed Rs. 500 million (excluding 3rd party costs detailed in the program design document) and the Program Steering Committee will seek approval of the ECC in case costs incurred by NBP exceed the above limit. Moreover, NBP will be paid a service charge of 0.12% of transaction value according to fees notified by SBP under ‘Agency Agreement between SBP and NBP.
According to PASS, existing ETCSP Steering Committee needs to be expanded to include the Federating Units and exclude SBP as per the request of the latter for which revised composition and Terms of Reference of the Program Steering Committee may be approved.
Ehsaas Targeted Commodity Subsidy Programme: Rs106.102bn approved by ECC
PASS also proposed that removal of the 3 exclusionary filters in compliance of the Cabinet decision has altered the PMT Score cut-off required to cover 20 million families under the program.
The cut-off is likely to further change given response to the registration drive. The Program Steering Committee may; therefore, be authorized to adjust the PMT Score for entitlement under the program to support the targeted 20 million families.
It also sought approval of budgetary allocation of Rs. 106.102 billion for the period of January 1, 2022-June 30, 2022 to cover subsidy for beneficiaries, incentives for Kiryanas, SMS charges to telecom operators, verification charges to PMD (Pakistan Mobile Number Portability Database) and NADRA, mobilization charges, NBP costs and fees and ancillary operational expenditures.
It also sought permission to draw in the support of any of its Ancillary Organizations to implement the program.
BISP support for mobilization and advertising should continue and direction for Establishment Division to depute 3 professionals (a Project Director, Deputy Director Payments and Payments Officer) on attachment basis (salary to be paid by the parent department) with effect from 10th December, 2021 till July 31, 2022 to ensure timely execution of the Program.
PASS also submitted the following proposals;(i) authorize the PASS Division to hire one of the Big Four Accounting Firms as an external auditor, through a limited tender inquiry, to review all transactions (subsidy and vendor payments) processed on monthly basis; (ii) three items covered under the program are essential commodities with inelastic demand; therefore, adoption of local prices may be allowed for the disbursement of the fixed per unit subsidy; (iii) allow direct procurement of services under rule-42 (c) (ii) of PPRA Rules 2004 from PMD and Telecom operators.
According to the PTA, PMD is the sole provider of verified mapping of each individual’s mobile phone number to owner’s CNIC. Similarly, only a mobile operator is capable of providing an SMS delivery confirmation with over 95% accuracy for beneficiaries on its own network;(iv) according to Kiryana Incentive Study, target Kiryana stores are located in communities with average monthly income of less than Rs. 30,000 per family. Hence, 8% of subsidy value as incentive for Kiryana stores (Rs.12 transaction, assuming average transaction value of Rs. 500) may be allowed and; (v) allow waiver of all taxes (service and withholding) on the incentive amount for Kiryana stores keeping in view their financial position.
During the ensuing discussion, the Finance Division; however, denied accusations of PASS, saying that it had no objection to the proposal. However, it was clarified that an amount of Rs 30 billion shall be contributed by the BISP budget.
PM to announce budget for ‘Ehsaas Targeted Commodity Subsidies Programme’: Sania
Moreover, the NBP service charges shall also be accommodated within the budget available with BISP. The point was agreed by the PASS Division. The matter relating to tax waivers requested by PASS Division was also discussed.
The ECC was informed that the food items are already exempted from taxes. However, if any kind of waiver would be required, it may be recommended to the Federal Cabinet, given importance of the program for common people.
The Establishment Division stated that a separate consultation session shall be required in order to resolve the issue of human resource as the proposal was not in order in the present shape. PASS Division agreed to hold separate consultation with the Establishment Division on the issue.
After detailed discussion, the ECC approved majority of proposals of Poverty Alleviation & Social Safety Division and also directed it to consult Establishment Division separately in order to resolve the issue of Human Resources.
ECC of the Cabinet also recommended waiver of taxes (Service and Withholding) by the Federal Cabinet on the incentive amount for Kiryana Stores keeping in view their financial position.
Copyright Business Recorder, 2021
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