Automation of USC: Utilization of Rs2.3bn Covid funds opposed

06 Feb, 2021

ISLAMABAD: Finance Secretary Kamran Ali Afzal has reportedly opposed utilization of Rs 2.3 billion Covid funds on automation of the Utility Stores Corporation (USC), fearing it will invite audit objections, well-informed sources told Business Recorder.

The Finance Secretary gave his stance at a recent meeting of Economic Coordination Committee (ECC) of the Cabinet, when a summary of Ministry of Industries and Production (MoI&P) on consumption of subsidy on essential commodities from 1 July, 2020, onward under the Prime Minister's Relief Package-20 came under consideration. Ministry of Industries and Production submitted the following proposals to the ECC; (i) approval of the consumption of general subsidy extended on five essential commodities from July 1, 2020 to December 31, 2020, may be granted; and (ii) 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.

Since December, 2019, the Federal Government had approved Rs. 71.00 billion for 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 USC has 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 various packages. Presently, out of the released funds, Rs. 10.00 billion are available with the Company.

During the ensuing discussion, the meeting observed that the ECC was not a forum to determine or fix the prices of commodities. Rather, it was a forum to outline broad policy parameters. It was pointed out that there was a lot of volatility in the prices of commodities in the market.

It was suggested that there should be a standard criteria/benchmark for fixing of prices of the commodities by the USC at its own level.

Regarding proposed utilization of Rs 2.332 billion on automation out of Rs 10 billion available with USC under Covid-19 package, the Secretary, Finance Division apprehended that the manner of utilization of the funds was not appropriate which could not only invite audit objection but also might be a point of concern for the foreign donors as there were international commitments involved. Therefore, this aspect should be taken into account while making decision thereon.

According to sources, the ECC has directed Ministry of Industries and Production to devise a standard benchmark for fixation of prices of five essential commodities, which should be based on percentage wise ranges for differential from prices generally prevailing in market and submit the same for consideration of the ECC.

On the issue of automation project of the USC as per the revised IT plan, the ECC directed the Ministry of Industries and Production to utilize requisite funds for the purpose, in consultation with Finance Division under laid down procedure.

Copyright Business Recorder, 2021

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