'Ramazan package'

It has become a tradition in our annual federal budgets to earmark a subsidy during the holy month of Ramazan with the objective of ensuring affordable prices of essential items, specifically food items, for the common man. Last year, the government earmarked 2 billion rupees for this purpose - an amount that has remained unchanged this year. While critics may well argue that this amount does not take account of the rate of inflation, yet by and large, there is evidence to suggest that the Utility Stores Corporation (USC) controlled rates do make a difference to the common man by not only ensuring a price for each product that is lower than the market rate but also by ensuring that the same rate per product is available throughout Pakistan. The mechanism for disbursing 'Ramazan package' is through the state-operated USC and like other state-operated entities USC too has been frequently in the news for all the wrong reasons namely for graft and mismanagement. In the past, during times of sugar shortage, USC officials were accused of selling this commodity to big buyers, including hotels and sweet shops, thereby violating the per person/family quota set by the government. Additionally, Audit Report prepared by the Auditor General of Pakistan (AGP) for 2011-12 notes the following disturbing practices of the management of USC: (i) the USC management did not provide audited accounts for 2009-10 and 2010-11 by December 31 2011; (ii) embezzlement by ex-employees to the tune of 29.116 million rupees with the requisite record showing neither an FIR was lodged (mandatory according to the entities Operational Manual when a regional manager does not ensure that the periodic accounts of his store shows a shortage of stocks/cash) nor any legal action was initiated against the employees, in spite of the fact that the employees in question had left the USC; (ii) irregular award of transportation contracts cost the USC an estimated 174.9 million rupees; (iii) irregular appointments cost the USC 2.28 million rupees; (iv) loss due to procurement of substandard black gram was around 14.6 million rupees; and (v) provision of store to franchise on credit and loss cost another 13.6 million rupees. Thus in the year under consideration USC suffered a documented loss of around a quarter of million rupees - money that would have gone some way in reducing the budgeted subsidy. Additionally, it is relevant to note that the AGP looks at a small percentage of the operations of any entity and hence the total embezzlement/mis-procurement/corruption is without doubt considerably larger. The Utility Stores Corporation (USC) of Pakistan was formed in 1971 by the founder of the Pakistan People's Party Zulfiqar Ali Bhutto by taking over 20 retail outlets from Staff Welfare Organisation. At present, USC operates in 9 zonal offices all over Pakistan that are operating 61 regions. The fact is that USC has considerable potential to act as a buffer for the poor especially given that the private retail sector in Pakistan remains unregulated to a large extent and often resorts to blatant profiteering by creating artificial shortages/smuggling to neighbouring countries and charging a price based on what it regards as the ability to pay of the consumers. In this context, a 'Ramazan package' becomes all the more necessary given the perception of our retail sector with respect to the high price a typical consumer would pay when he/she is fasting. Be that as it may, it is nonetheless important for the government to also turn its attention towards ensuring that the private retail sector charges do not reflect any element of profiteering. In short, there must be a serious attempt to move away from subsidies which does not appear to be the case.