The two-billion-rupee Ramazan Relief Package for flour announced by the Sindh government seems nothing more than a populist measure, as the proposed amount is too small to adequately provide subsidy to the entire needy population. About 50 million people reside in Sindh, according to Federal Bureau Statistics.
Let us assume that about 30 percent of this figure has a relatively steady and adequate income level. This leaves 35 million people for whom this flour package is absolutely essential. The commodity is currently being sold at Rs 30 per kilogram in the open market; implying that the government plans to provide a support of Rs 20 per kilogram in order to be able to sell flour at Rs 10 per kilogram as claimed.
This means the allocated Rs 2 billion would subsidise 100 million kilogram of flour. Knowing that the per capita wheat flour consumption in Sindh is 9.1 kilogram per month, a simple calculation reveals that only 11 million people would fully benefit from the package.
The other option is to distribute 3 kilograms of flour to all the 35 million needy, but that would fall short of meeting that average wheat flour consumption. Either way, the package will foster inequality. While the government is suggested to expand the scope of the package or to, at least not flaunt it as a panacea, it is also advised to carefully monitor the distribution system.
If they deem the NIC mechanism as inefficient, then they must come up with a better solution to ensure that profit seekers from the open market, either wholesalers or retailers, do not purchase flour for hoarding purposes. If that happens, the government will be effectively subsidising the hoarders, who could then charge even more after Ramazan and a significant portion of public money would go to waste, yet again.
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