Ministry of Industries and Production (MoI&P) has sought a subsidy of Rs 7 billion per annum to sell sugar and other essential items at Utility Stores Corporation (USC), well informed sources told Business Recorder. The Federal Cabinet in its meeting held on 9th June 2007 decided to open 5,000 new utility stores at Union Council-level throughout the country.
The opening of these stores was linked to the sale of essential commodities which included Atta, Ghee & edible oil, sugar, pulses and rice to be sold on subsidised rates. Some of the relevant portion of the decision of Federal Cabinet of its meeting dated 9th June 2007 is reproduced for ready reference: "Provision of various food subsidies in the price of sugar, atta, pulses, edible oil/ghee and other essential items through Utility Stores Corporation. 5,000 new Utility Stores will be opened at every Union Council Level." According to sources, the sale of essential commodities on subsidised rates was also announced in the Federal Budget 2007-08. The relief package remained effective from July 2007 to June 2008. However, the subsidy on other items except sugar was discontinued in the Federal Budget of the year 2008-09.
Presently, 65% stores of the Corporation are functioning in rural areas. In compliance with the decision of the government, the Corporation had been selling sugar on subsidised rates from July 2008 to April 2014. The ECC in its meeting held on 15th April 2014 decided to discontinue subsidy on the sale of sugar as well.
Despite selling essential commodities at prices lower than the market, the Corporation has deposited various taxes of more than Rs 30.00 billion during the last seven years in the government exchequer. Ministry of Industries will submit its proposal to a committee headed by Finance Minister Senator Ishaq Dar, requesting that Government may restore subsidy on the sale of sugar. Essential food items may be subsidised on a regular basis, which may have a monthly financial impact of around Rs 500 million to Rs 600 million per month, depending on the number of items and the approved amount of subsidy.
Ministry of Industries further stated that the government is annually disbursing around Rs 70 billion the BISP beneficiaries. This disbursal can be linked through USC outlets and beneficiaries can avail an extra advantage by procuring items on reduced prices. The Government of Khyber Pakhtunkhwa is providing wheat flour and vegetable ghee/oil to the beneficiaries of BISP in the province of Khyber Pakhtunkhwa on subsidised rates. It is unclear whether or not the MoI&P consulted the USC board on package of Rs 7 billion from federal government.