ECC asks Finance to revisit subsidies

The Economic Co-ordination Committee (ECC) of the Cabinet has given key role to the Finance Ministry to revisit subsidies on essential items, sources told Business Recorder here on Saturday. The ECC meeting on April 8 noted that position papers on cement, edible oil/ghee and sugar were circulated for information of the ECC members.
Sources said that the government was also reviewing last government's decision of extending the utility stores network to the union council level due to paucity of funds. "Industries Ministry and Minfal have been directed to adopt proactive and futuristic approach to manage the crisis likely to emerge in the commodities sector, especially edible oil," sources said.
The ECC was of the view that huge quantum of subsidy and its practical efficacy should be revisited in consultation with Finance Ministry, and the findings/recommendations should be forwarded to the competent forum for early implementation, sources said.
They said that the ECC had further decided that presentation and discussion on essential items be discontinued. However, analysis would continue to be undertaken regularly for circulation among participants of the ECC as reference material to be used as and when required.
They said that Rs 12 billion per annum subsidy was being given on edible oil/ghee being sold through Utility Stores Corporation (USC). The previous government had announced to expand the USC network aimed at providing essential goods and medicines not only in the cities but also in the far-flung areas where most of the population resides.
However, the Shaukat Aziz-led government, which made tall claims of ballooning the economy, did not succeed in providing wheat and flour to the people at affordable rates and, consequently, was defeated in general elections.
The previous government had earmarked Rs 100. 4 billion for subsidy in 2007-08, of which Rs 7.5 billion had been allocated for sugar, Rs 1.2 billion for cotton operation, FFC Jordan, Rs 0.9 billion, oil refineries Rs 125 billion, sale of wheat to FATA Rs 0.5 billion, USC Rs 1.8 billion. However, sources said that Finance Ministry would give a relief package in the 2008-09 budget, as was promised by Prime Minister Yosuf Raza Gilani in his speech in the National Assembly.