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Targeted subsidy: PM Imran announces Rs120-billion relief package

  • Says lower rates on ghee, wheat flour, and pulses would be available for eligible families for the next six months
  • Prime minister, however, says prices of petroleum products will be increased soon
Updated 03 Nov, 2021

In a brief address to the nation, Prime Minister Imran Khan said Pakistan's economic recovery is currently underway, adding that the country's inflationary pressure would reduce after the post-pandemic situation improves.

Sharing details of the 'relief package', Khan said that a Rs120-billion programme has been designed that would see subsidised rates on ghee, pulses, and wheat flour.

"This programme has been designed for 20 million eligible families, which translates to 130 million people," said Khan, refraining from diverting towards other topics. "For the next six months, 30% discount would be given on these three food items."

The premier said that the Pakistan Tehreek-e-Insaf (PTI) government inherited a difficult economic situation. He thanked Saudi Arabia, the UAE, and China for providing the help that saved Pakistan from defaulting.

"We had to approach the IMF, we were stabilising the country for a year and then coronavirus came," he said.

"We were internationally acknowledged for being one of the few countries to deal with Covid-19 in the best manner."

Khan added that prices of petroleum products, which were kept constant at the start of this month, would have to be increased as the government is unable to take the hit on its revenue.

"I understand that inflation is a serious issue, but I want the media to put a balanced narrative. Is my government responsible for global inflation?

"In the past 3-4 months, oil prices have increased 100% globally but the increase in Pakistan is only 33%. I want to tell you that we will have to increase the oil prices in our country, otherwise our deficit will grow."

Meanwhile, he lauded the National Command and Control Centre (NCOC) for taking effective and data-driven decisions that aided Pakistan's fight against the coronavirus. "In the past 100 years, the world hasn't seen a bigger crisis than the coronavirus pandemic," he said.

Reviewing past-year's performance, Khan said that Pakistan has recovered well, with urea, motorcycles, cement sales, and electricity consumption posting strong growth year-on-year.

"We allowed the construction industry to operate during Covid-19. We tried to save our exports because if they had stopped, then the rupee would have fallen (further)."

"Our policies prevented the economy from collapsing," he added.


Earlier on Tuesday, talking to reporters after the federal cabinet's meeting, Minister for Information and Broadcasting Fawad Chaudhary claimed that daily essential commodities prices in Pakistan were considerably cheaper when compared regionally, particularly with India, Bangladesh, and Afghanistan.

PM to announce relief package today

The minister said petrol is the cheapest in Pakistan among all the non-oil producing countries. However, it remains to be seen how long the country could sustain the existing prices in the wake of a sharp increase in the prices of oil in the international market.

He said that even in these countries poverty is higher when compared to Pakistan.

Fawad says relief package to be announced soon

The minister said that the primary problem is the difference between the prices of commodities between Punjab and Sindh, as a provincial comparison presented to the federal cabinet disclosed that prices of wheat, sugar, and pulses are significantly higher compared to Punjab. A wheat flour 20kg bag is available at Rs1,100 in Rawalpindi, while its price in Karachi is Rs1,475, he said.

Sugar per kg price is Rs120 in Karachi compared to Rs90 in Punjab and moong pulse’s Rs196 in Karachi compared to Rs148 in Punjab, etc.

The minister blamed the provincial government of Sindh for failing to control the prices of essential items and stated that the provincial government is required to review the administrative system.

Last month, the information minister had said that prices of essential items including vegetables, cooking oil, flour, and wheat were seeing a declining trend.

The minister said that sugar prices were coming down and would reduce further once the crushing season begins.

Inflation fears in Pakistan have also been compounded by a dramatic increase in the prices of international commodities with coal, copper, oil all contributing massively to the negative sentiment. Pakistan heavily relies on energy-related imports, which contributes to its bulging import bill.

Targeted subsidy programme: Masses to get relief from next month: Umar

Last month, ruling out an immediate relief, Minister for Planning, Development, and Special Initiatives Asad Umar had said that it could take at least five months for the increase in global commodity prices to head towards normalcy.

Sales tax on edible oil will be cut from 17% to 8.50%, customs duty per ton to be halved and additional customs duty will be abolished, Umar added.

The government has come under heavy criticism in recent weeks as the pace of inflation increases in Pakistan, affecting people's purchasing power and their real incomes.


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