ECC Approves Continuation of Subsidies on Five Essential Items

The Economic Coordination Committee of the Federal Cabinet (ECC) has deliberated over and approved the continuation of un-targeted subsidies on five essential commodities until 31 March 2022.

The ECC considered and allowed the continuation of subsidies on five essential items flour, ghee, sugar, rice, and pulses between 24 and 28 February and for March.

Furthermore, the chairperson directed the Utility Stores Corporation (USC) to seek guidance from the Ministry of Law and Justice on the continuation of subsidy on these items for the initial 23 days of February.

The Ministry of Industries and Production had moved a summary titled the ‘Mechanism for Price Revision of Non-subsidized Goods and Continuation of Un-targeted Subsidy after 31 December 2021’ for the ECC in December 2021. At that time, the ECC had allowed the continuation of the existing subsidies for five essential commodities until 31 January 2022 at USC outlets.

Since 1 February 2022, the USC has been continuing the sales of the five aforementioned essential items at subsidized rates to continue providing relief to a large chunk of the population that may not be benefitting from the Ehsaas Program. Secondly, since the program will take months before offering coverage to everyone, the Ministry of Industries and Production requested that the five essential items be sold at the existing subsidized rates at USC outlets until 30 April 2022 (including the holy month of Ramzan) as relief for poor segments of the population not covered by the Ehsaas Program.

The impact of un-targeted subsidy as calculated by USC for the months of February, March, and April (Ramzan) are as under:

February March April (Ramzan) Total Subsidy
Rs. 2.681 billion Rs. 2.4337 billion Rs. 8.280 billion Rs. 13.361 billion

 

Foregoing in view of the above, the ECC considered the subsidies in the said format in today’s meeting and allowed the continuation of the subsidy on the five essential items between 24 and 28 of February and for March.

Meanwhile, the USC Senior General Manager Inayatullah Daula told reporters that there will be a 5-15 percent subsidy on 1,700 items at USC outlets during the month of Ramzan. This subsidy will be promulgated in addition to the Ramzan package, which is expected to be approved in the next meeting of the ECC.

Automation of utility stores will reduce corruption, he added.



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