Five items available at USC outlets: Ministry seeks nod for continuation of subsidy

ISLAMABAD: Ministry of Industries and Production (MoI&P) has sought the federal government’s nod for continuation of general subsidy on five items at the USC outlets from the unutilized amount of Covid-19 package till June 30, 2021, official sources told Business Recorder.

Since December, 2019, the Federal Government had approved Rs. 71.00 billion for Utility Stores Corporation (USC), to support the underprivileged segments of society through provision of five essential food items at subsidized rates.

The funds were earmarked under different packages including Prime Minister’s Relief Package-2020; Ramzan Relief Package-2020; and, Prime Minister’s Relief Package-2020 launched under COVID-19 pandemic.

So far, Rs. 31.00 billion (including Rs. 2.5 billion earmarked in budget estimates 2019-20 for Ramzan Package, 2020) have been released to USC, in a phased manner.

The sources said, USC has noted that till December, 2020, it had utilized Rs. 10.00 billion for purchase of inventories under various packages and Rs.11.027 billion on account of provision of general subsidy on five essential commodities from January to December, 2020, under the various packages. Presently, out of the released funds, Rs. 10.00 billion are available with the Company.

As far as the provision of subsidy is concerned, USC has intimated that Rs.4.819 billion (audited) were utilized from January 01, 220 to June 30, 2020 in accordance with the Cabinet decision of February 11, 2020. Besides, in the wake of COVID- 19 pandemic and rising inflation, Rs.6.208 billion (un-audited) were utilized from July 01, 2020 to December 31, 2020 for provision of five essential items on approved subsidized rates.

USC has, accordingly, solicited approval of the general subsidy it has extended on five essential items beyond July 01, 2020, besides permission for continuing with it till June 30, 2021.

USC has also intimated that the prices of five essential commodities have changed substantially in the open market since the time these were fixed with the approval of the Cabinet.

Accordingly, in order to rationalize the quantum of subsidy to be consumed in future, USC requested for revision of the subsidized prices of three essential commodities viz. wheat flour, sugar and ghee.

During 4th meeting of the ECC’s Committee of the Cabinet on USC held on November 17, 2020, it was observed that integration of USC with Ehsas Program, for extending targeted subsidy, rested on its automated infrastructure. The Company has planned automation of its 4,000 regular outlets by June 30, 2020, for which a revised action plan had been shared with the Prime Minister’s Office on November 03, 2020. The automation plan entails financial outlay of Rs.2.332 billion and the Company has solicited approval for meeting this expenditure out of Rs.10.00 billion available with it.

In view of the foregoing, following proposals are submitted for soliciting approval of ECC of the Cabinet: (I) Consumption of general subsidy extended on five essential commodities from July 01, 2020 to December 31, 2020. Besides, continuation of general subsidy on five essential items from January 01, 2021 to June 30, 2021, out of un-utilized funds of Rs. 10.00 billion earlier released under COVID-19 package, may also be allowed and ;(ii) a revised schedule of subsidized prices of three essential commodities for the period January - June 2021, as requested by USC may be approved. However, quantum of subsidy per kg of rice and pulses shall remain the same, as already approved by the Cabinet.

The Ministry has also requested the ECC for permission accorded in favour of USC for incurring an expenditure of Rs.2.332 billion on automation of the Company, as per revised IT Plan, out of Rs 10.00 billion available with it under COVID-19 package, subject to fulfillment of all formalities.

Copyright Business Recorder, 2021