Purchasing power parity: Package amount less than the money doled out previously: ex-FinMin

The government relief package of Rs 144 billion in the form of emergency cash assistance to 12 million families is less in real terms as opposed to Rs 120 billion disbursed by the previous administration in 2018-19, if rupee depreciation is taken into account, stated a former Finance Minister on condition of anonymity.

He further stated that there was no point in comparing US and Pakistan Coronavirus relief packages given the wide difference in the size of GDP and per capita income of the two countries.

Former finance minister, however, stated that Rs 144 billion emergency cash transfer in the government relief package for 12 million families, if calculated at the current exchange rate, would be around $900 million whereas Rs 120 billion disbursed by the previous administration under Benazir Income Support Program (BISP) was over $1 billion. Thus, he added that in real term the same amount was disbursed in 2018-19.

He further added that Rs 12,000 being disbursed by the government to the poor families might be adequate for the current month but if the situation is prolonged there would be serious problems for the government.

So, he added that there is need that $1.4 billion RFI should also be utilized for providing relief to the most vulnerable families as well as those $500 million each of the World Bank and Asian Development Bank.

An official of finance ministry supported this contention, adding that there was no comparison between Pakistan and US as dynamics of the two economies were widely different, however, he maintained that emergency cash assistance being provided by the government to 12 million families against coronavirus has so far been the biggest in developing world as covering 12 million families means that coverage of 72 million or 30 percent people of the total population. No country has so far announced a relief package to provide financial assistance to 30 percent of population, he added.

Background interaction with some officials in the finance ministry revealed that real thing in the relief package was only emergency cash disbursement to the poor families and other relief allocations related to industry and Passco for wheat procurement.