The Finance Ministry will divert Rs 1.5 billion from Rs 3.5 billion earmarked for sale of sugar towards Rs 2.27 billion Ramazan Package approved by the recently held meeting of the Cabinet with Prime Minister Syed Yousuf Raza Gilani to provide essential commodities at cheaper rates to people at Utility Stores Corporation outlets, it has been reliably learnt.
Sources said federal government has allocated only Rs 700 million for Ramazan Package in 2010-11 budget whereas the Cabinet has approved Rs 2.27 billion for the purpose. The shortfall of Rs 1.5 billion would be met by diverting from Rs 3.5 billion allocated in the budget for sale of sugar at USC in 2010-11, they added.
The budget documents showed that subsidy for Ramazan package was slashed to Rs 700 million in the current fiscal year compared to Rs 1.5 billion allocated in the 2009-10 budget. Sources said the Cabinet was apprised about the increasing trend in the prices of essential commodities particularly pulses during the last few months as well as about the behaviour of the private sector.
The Cabinet was told that normally the demand of essential items such as wheat, flour, sugar, pulses, Baison, dates, tea, squashes and syrups during Ramazan each year increases and private sector benefits from the situation by increasing prices. "It is generally observed that in Ramazan private sector increases the price of these commodities due to enhanced demand," the meeting was informed.
Therefore, in consonance with the objectives of USC, the government announces a relief package every year decreasing prices of essential commodities. "This package will not only provide economic relief to consumers but also help in stabilising prices in the open market," sources added.
The USC in the Ramazan package has proposed reduction in the prices of 400 items up to 10 percent, according to sources. The package proposed a reduction of Rs 10 per kg Atta, Rs 20 per kg ghee/oil, Dal Chana, white gram, rice Basmati, rice Tota, rice Sella, Baison, dates, squashes, syrups 10 percent on existing USC prices, and tea five percent on existing USC prices. The USC is already selling sugar at the subsidised rate of Rs 45 per kg, which implies no further subsidy on sugar in the package has been proposed.