5 edible items: Subsidy likely to continue for 2 more months

ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet, which is scheduled to meet on Monday (today) is to approve continuation of subsidy on five items stocked in Utility Stores Corporation (USC) under the PM’s package for two more months (May and June) 2022, well informed sources told Business Recorder.

On March 15, 2022, the ECC in its decision, duly ratified by the Cabinet, approved Ramzan Relief Package-2022 for the general public which included subsidy on 19 commodities with a total subsidy of Rs.8.2 billion effective from April 1, 2022 till the last day of Ramzan 2022. Prior to the Ramzan, five essential commodities, namely Atta, sugar, Ghee, rice, and pulses were subsidized for the general public under the Prime Minister’s Relief Package-2020.

The sources said, as of now, Utility Stores Corporation does not have approval for continuation of subsidy post Ramzan and, therefore, in the absence of an approved plan, prices of commodities sold at Utility Stores will register significant increase. This increase in prices is likely to spark outrage among the poor segment of the population.

According to sources, keeping in view the current situation, Ministry of Industries and Production argues that the ECC may approve continuation of subsidy post Ramzan on at least 5 essential commodities under the Prime Minister’s Relief Package-2020.

Utility stores raise rates of food items as Ramazan package ends

The MoI&P noted that PASSCO is supplying imported wheat to USC at Rs. 3283 per 40 kg which results in flour price of Rs. 3938 per 40 kg whereas local wheat of higher quality is available with PASSCO at Rs. 2473 per 40 kg which would result in flour price of Rs. 2926 per 40 kg. Therefore, PASSCO may be directed by the ECC of the Cabinet to provide local wheat to the USC excluding incidental charges which will substantially reduce the subsidy requirement for USC.

The sources further stated that Utility Stores Corporation is successfully executing the Ramzan Relief Package-2022 through its recently deployed POS and ERP system. In order to bring further improvements, the MOI&P has strongly proposed that any subsidy disbursement in future must be linked with online verification with NADRA. This initiative is going to involve cost of Rs.5 excluding tax, per verification of CNIC as indicated by the NADRA. This will allow USC to waive the condition of retention of photocopy of CNIC while ensuring equitable and transparent distribution of subsidy.

Moreover, the MoI&P has also proposed that following ceilings may be approved for quantity of essential items per family: (i) Atta-40 kg; (ii) sugar -10 kg ; (iii) Ghee- 10 kg ;(iv) rice- 05 kg; and (v) pulses-05 kg.

The MoI&P has requested the ECC that for continuation of USC operations in a smooth manner, total outstanding amount of Rs.16 billion on account of subsidy approved by the ECC for the previous months needs to be released by the Finance Division on immediate basis so that USC can pay its vendors and suppliers for un-interrupted supply and provision of essential commodities to the most deserving segment of population.

The ECC is also expected to direct PASSCO to provide local wheat to the USC excluding incidental charges which will substantially reduce the subsidy requirement for USC.

Copyright Business Recorder, 2022