Kafaalat programme of BISP: Jan benefit adjustments protected generosity level: IMF

ISLAMABAD: The benefit adjustment carried out in January (for Kafaalat beneficiaries of the Benazir Income Support Programme - BISP) protected the scheme’s generosity level, which remains low by international standards— and such adjustments should be institutionalised to at least maintain generosity levels in real terms, the International Monetary Fund (IMF) has noted in its latest report.

The larger envelope (Rs 472 budget for current financial year) allowed the BISP to absorb another 300,000 families into the Kafaalat unconditional cash transfer (UCT) programme this fiscal year, bringing total enrolment to 9.3 million, states the IMF’s Country Report: Second and Final Review Under the Stand-by Arrangement for Pakistan, issued on Friday.

It is worth recalling here that the former caretaker federal government increased BISP’s quarterly stipend for Kafaalat beneficiaries from Rs 8,750 to Rs 10,500 this January.

This benefit adjustment, according to IMF, protected the BISP’s generosity level, which remains low by international standards.

In terms of BISP’s conditional cash transfer (CCT) programmes; the IMF document stated, this fiscal year, 0.9 million families and 1.9 million children, respectively, have been enrolled into these health and education CCT programmes.

“Health and education spending outside of BISP, for which the end-December 2023 target was met, should be protected and fully executed as budgeted for the rest of FY24. Pakistan’s progressive energy tariff structure continues to protect the most vulnerable, but in the long term, this should be replaced by BISP cash transfers,” the report notes.

“Efforts to maintain, if not increase, generosity levels in real terms via annual inflation indexation going forward and to expand CCT programmes where possible are welcome, as are continued improvements in BISP’s administrative capacity,” according to the IMF document.

The report says that Pakistan’s authorities aim to have 20 million households in the fully operational dynamic registry by September 2024, at which point the next recertification cycle will proceed.

The BISP has updated its contracts with banks to expand coverage across the country, enhance payment efficiency, and reduce administrative cost, the document states.

The report also carries a joint letter of intent from last month by Pakistan’s Finance Minister Muhammad Aurangzeb and Governor State Bank of Pakistan (SBP) Jameel Ahmad to Managing Director IMF Kristalina Georgieva in which the Pakistani officials assured the IMF chief that they would ensure that “social protection is strengthened further, including through increasing the generosity and coverage of existing schemes, and increasing its efficiency and transparency. We will also engage the provinces on sharing the social expenditure burden under BISP.”

The finance minister and governor SBP also informed the MD IMF in their letter that Pakistan met Structural Benchmarks (SBs) on inflation adjustment of BISP.

Copyright Business Recorder, 2024