Relief to masses against POL price hike: Govt to utilize allocation for Rashan Riayat subsidy

ISLAMABAD: The government has decided to utilize the allocation of Rashan Riayat targeted commodity subsidy for providing relief under the Prime Minister’s Relief Package to low-income households against an increase in petroleum prices.

Sources said that on the request of the Ministry of Poverty Alleviation and Social Safety (PA&SS), Finance Minister Miftah Ismail led the Economic Coordination Committee (ECC)meeting on May 28 that allowed a transfer of Rs24 billion from the Benazir Income Support Programme (BISP) to the Ministry of PA&SS after it was informed that the Finance Division has allowed a transfer of Rs30 billion as technical supplementary grant from the BISP to the Ministry of PA&SS for Rashan Riayat/targeted commodity subsidy.

Sources further stated that the ministry stated though the government is currently providing across the board un-targeted fuel subsidy, the same is costly, unsustainable and inequitable as the benefit disproportionately goes to richer households consuming relatively more fuel products. The fiscal constraints as well as equity concerns call for a major shift towards targeted relief for providing a cushion to the poor and the vulnerable in the society, particularly, farmers, users of public transport, rickshaws, motorbikes, and others.

The meeting was further informed that the Benazir Income Support Program (BISP) provides a safety net through cash transfers to vulnerable and deserving households. The BISP has recently completed its poverty scorecard survey for the National Socio-Economic Registry (NSER) database across the country through which data on the socio-economic status of 32.6 million households was collected.

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The households were divided into five different socio-economic segments/Quintiles for ease in discrete targeting of social protection benefits.

At present, the BISP is providing an unconditional cash transfer of Rs14,000 per family on a half yearly basis to seven million eligible households, falling in the lowest two Quintiles and has a budget to reach out to eight million households by the end of the Financial Year 2021-22.

In pursuance of the prime minister’s earlier directive, the finance minister, in a meeting held on May 27,2022 endorsed the proposal for the disbursement of additional relief to offset the impact of the hike in prices of petroleum products. The relief will be provided to 14 million households, ie, 06 million more households in addition to the existing 08 million regular BISP beneficiaries by raising the existing Proxy Means Test (PMT) score to cover the third Quintile using the NSER database. BISP has a payment mechanism in place through which this targeted relief can be disbursed quickly using biometric-based payment system.

The total expenditure on the proposed relief package for the current quarter (April-June 2021-22-one-time disbursement @ Rs2,000 per beneficiary is Rs28,624 million.

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The Finance Division has allowed the transfer of Rs30 billion as Technical Supplementary from BISP to Ministry of PA&SS for Rashan Riayat/targeted commodity subsidy out of which Rs 20 billion may be transferred back by Ministry of PA&SS while Finance Division may provide Rs 8,624 million as Supplementary (grant/budgetary allocation in the next financial year, the ministry added.

The ECC was also told that at present, composition of BISP Board is not complete as per requirement of the Act. Section 25 of the Act, however, provides that if any difficulty arises in giving effect to the provisions of this Act, the federal government may make such orders as it is necessary or expedient to remove such difficulty. The federal government may, therefore, issue orders to BISP to implement the proposed targeted relief package.

Copyright Business Recorder, 2022